The Earned Income Tax Credit (EITC) is designed to benefit low to moderate-income workers. And, honestly, it can be a saving grace. Even though it takes a little extra work and effort, IT IS WORTH IT. You could get thousands more on your refund or get a major tax break—cha-ching.
It was created back in the 70s to help working families who may not earn enough to cover their basic needs.
What does it do?
Basically, it either reduces the amount of taxes you owe or helps you get a larger refund. The amount varies depending on your income, family size, and filing status. In some cases, the EITC can be as much as $7,830 for families with three or more children, but any money saved or received is good money.
To get the tax credit, you must:
- Have worked and earned income under $63,398
- Have investment income below $11,000 in the tax year 2023
- Have a valid Social Security Number by the due date of your 2023 return (including extensions)
- Be a U.S. citizen or a resident alien all year
- Not file Form 2555, Foreign Earned Income
- Meet certain rules if you are separated from your spouse and not filing a joint tax return
How to Get the EITC:
To claim the EITC, eligible taxpayers must file a tax return, even if they are not required to file one.
- File Form 1040, Form 1040A, or Form 1040EZ
- If you have a qualifying child, you also need to fill out a Schedule EIC, Earned Income Credit.
The important thing to remember is that you must file a tax return to get this credit. Even if you don’t have to file a return because you received no income or have another exclusion, you need to file one to get this. Plus, if you don’t have to file a return, that means it will be simple to file one and you will be able to use a free program to do it (here’s how).