The Earned Income Tax Credit (EITC) is a tax credit that is designed to benefit low to moderate-income workers. It was established in 1975 to help support working families who may not earn enough income to meet their basic needs. The credit is intended to provide some relief to individuals and families by reducing their tax burden or by providing a refund.
What does it do?
If you are eligible for the EITC, you can either reduce the amount of taxes you owe or receive a refund. The amount of the credit varies depending on income, family size, and filing status. In some cases, the EITC can be as much as $6,728 for families with three or more children.
Who is Eligible?
To get the tax credit, you must:
- Have worked and earned income under $59,187
- Have investment income below $10,300 in the tax year 2022
- Have a valid Social Security number by the due date of your 2022 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 Earned Income Tax Credit is an important tool that can provide valuable assistance to working families who are struggling to make ends meet. If you think you may be eligible for the credit, it’s important to file a tax return and claim the credit. The EITC can help you reduce your tax burden or receive a refund, which can help you meet your basic needs and improve your financial stability.