Today, January 26, 2024, is Earned Income Tax Credit Awareness Day. What is this credit and do I qualify to get it. Earned Income Tax Credit (EITC) is a credit that benefits millions of low- and moderate-income workers. Many taxpayers have misunderstandings of this credit and many overlook this valuable tax benefit.
The first qualifier is that the taxpayer has earned income. Earned income is all taxable income (wages, salaries, and tips) that you receive from working or from certain disability payments. Earned income also includes union benefits and long-term disability benefits received prior to retirement age. If you are self employed, the earned income is based on the net earnings (profit).
According to the IRS, people with earned income that don't exceed the following amounts qualify:
a single person earning $56,838 ($63,398 married filing jointly) with three or more qualifying children who have valid Social Security numbers (SSNs).
a single person earning $52,918 ($59,478 married filing jointly) with two qualifying children who have valid SSNs.
a single person earning $46,560 ($53,120 married filing jointly) with one qualifying child who has a valid SSN.
a single person earning $17,640 ($24,210 married filing jointly) with no qualifying children with valid SSNs.
Investment income must be $11,000 or less.
The second qualifier is having a social security number for themselves, their spouse if filing jointly, and for the dependents that they are claiming the credit for.
Age is another qualifier for those without dependents. Qualifiers must be between the ages of 25 and 64. You may also qualify if you are married, but separated if you meet certain requirements.
What is the easiest way to tell if you qualify? The IRS has an assistant (click on the box below)
that will ask a series of questions about your filing status, income, age, and dependents if you are claiming any. At the end it will give you the amount of credit that you could receive as well as links to sites where you may be able to file federal and state for free. See the information about free filing under my tab for "Latest News".