For the first time, older adults who work could get money from the federal government to boost their income through the Earned Income Tax Credit.
You may qualify for more than $1,500, helping you cover housing costs and other bills, including food, health care, education and more.
1 in 5 lose out on this tax break each year, likely because they are unaware they qualify. Make sure to file your taxes by April 18, 2022, so you can claim your credit.
Tax day is approaching and that means it's almost time to submit your tax return. Did you know, though, that you could qualify for more than $1,500 just by checking if you're eligible for the Earned Income Tax Credit (EITC)?
If you’re 65 years old or older and your income is low- to moderate, you may qualify for the EITC—a credit that could reduce the taxes you owe and help you with the cost of everyday expenses.
With the EITC, your refund could see a boost of more than $1,500 if you don’t have children living with you or up to $6,700 if you are caring for kids.
And the most important news? You can qualify for the EITC if you make up to $27,380 without kids in your home or $57,414 if you're caring for children.
What is the Earned Income Tax Credit?
Enacted in 1975, the Earned Income Tax Credit (EITC) was created to serve as an antipoverty program, helping millions of American families every year. More people than ever before will qualify for significant new tax benefits this year thanks to changes in the American Rescue Plan (ARP), including the ETIC. The maximum credit has nearly tripled for taxpayers and is, for the first time, available to both younger workers and older adults.
The problem? The Earned Income Tax Credit is a real benefit that not enough people know about. At least 20% of eligible workers don’t claim this benefit each year, likely because they are unaware they qualify. Now with the federal expansion, this number could go up and many could be at risk in missing out.
How do I know if I qualify for the Earned Income Tax Credit?
Before you find out if you qualify, it's important to note that this tax break isn't a loan, and social security benefits and pensions don't count as income for this tax credit.
To qualify for the Earned Income Tax Credit, or EITC, you must:
- Have worked and earned income under $57,414
- Have investment income below $10,000 in the tax year 2021
- Have a valid Social Security number by the due date of your 2021 return (including extensions)
- Be a U.S. citizen or a resident alien all year
- Not file Form 2555
- File your tax return by April 18, 2022
The amount of your EITC credit may change if you're caring for children, have dependents, are disabled, or meet other criteria. If you're confused or unsure, the Internal Revenue Service (IRS) has made it easy for you find out if you qualify through their EITC Assistant, or calculator that determines your eligibility.
To use the EITC Assistant, you'll need:
- Income statements such as W-2s, 1099s
- Documents showing taxes withheld or money paid to you
- Any expenses or adjustments to your income
To ensure you protect your personal information, the IRS recommends not to provide sensitive information such as your name, Social Security number, address, or bank account numbers. To start, answer a few quick questions about yourself to see if you qualify for the EITC.
How can I get help filing my tax return?
There are a few free basic tax return prepartion services that you may qualify for, including the IRS's Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs.
Now, for more than 50 years, VITA sites offer free tax help to people who need assistance in preparing their own tax returns, including:
- People who generally make $58,000 or less
- Persons with disabilities; and
- Limited English-speaking taxpayers
You can find a VITA site in your community, often at neighborhood centers, libraries, schools, shopping malls, among other convenient locations. Use the VITA Locator Tool or call 800-906-9887 to find the nearest site near you.
GetYourRefund.org, a nonprofit service built by Code for America, is another resource that can provide information about how to get the EITC. If it’s your first time filing your taxes or if you need help filling out the form to claim your EITC credit, GetYourRefund.org has free resources and IRS-certified volunteers who can help.
Will my tax refund be delayed if I claim the Earned Income Tax Credit?
Yes. According to the IRS, if you claim the EITC, your tax refund could be delayed. Unfortunately, by law, the IRS can't issue EITC refunds before mid-February. You can file your tax return now and the IRS expects you to see most EITC related reunds within your bank account or on debit cards by March 1.
To be sure you can get your refund by March 1, you can:
- File your return online
- Choose the option of getting your refund by direct deposit
- Make sure the IRS doesn't find any issues with your tax return
The IRS has ways you can avoid common errors when filing your tax return. And if you're wanting to track the status of your return, the best way to do that is through the IRS' Where's My Refund? or the IRS2Go mobile app.