It is estimated that millions of taxpayers will miss out on the Earned Income Tax Credit (EICT) in 2022, worth up to $6,935. Over 30 million workers in 2022 are eligible for the tax credit worth over $60 billion. Estimates indicate that up to 20% of eligible taxpayers are not aware of this tax credit. If you are unsure if you qualify, you can check out the EITC Assistant through the IRS website.
What Is the EITC?
A tax credit is a dollar-for-dollar offset against taxes owed. If you owe no taxes, you will receive a check from the US Treasury. Generally, those who earn less will be eligible for a larger credit. Requirements to qualify for the tax credit include:
- Workers with three or more qualifying children who have valid Social Security numbers, married filing jointly, with income of $59,187 or less ($53,057 filing single).
- Workers with two qualifying children who have valid Social Security numbers, married filing jointly, with income of $55,529 or less ($49,399 filing single).
- Workers with one qualifying child who has valid Social Security numbers, married filing jointly, with income of $49,622 or less ($43,492 filing single).
- Workers with no qualifying children, married filing jointly, with income of $22,610 or less ($16,480 filing single). You must be between the age of 25 and 64.
- Investment income must be $10,300 or less.
- You must file a tax return.
Be sure to consult with your financial advisor!
|
Children |
Maximum EITC |
Filing Single |
Married & Filing Jointly |
|---|---|---|---|
|
0 |
$560 |
$16,480 |
$22,610 |
|
1 |
$3,733 |
$43,492 |
$49,622 |
|
2 |
$6,164 |
$49,399 |
$55,529 |
|
3+ |
$6,935 |
$53,057 |
$59,187 |
This is an overview of the EITC numbers mentioned in the requirements above.
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Stewart H. Welch, III, CFP®, AEP, is the founder of THE WELCH GROUP, LLC, which specializes in providing fee-only investment management and financial advice to families throughout the United States. He is the author or co-author of six books, including 50 Rules of Success; J.K. Lasser’s New Rules for Estate, Retirement and Tax Planning- 6th Edition (John Wiley & Sons, Inc.); THINK Like a Self-Made Millionaire; and 100 Tips for Creating a Champagne Retirement on a Shoestring Budget. For more information, visit The Welch Group. Consult your financial advisor before acting on comments in this article.
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