There are only a few tax breaks accessible for low-income adults who don’t have youngsters. Fortunately, some important changes had been made to the Earned Revenue Tax Credit score (EITC) final yr, making this very important tax profit accessible to many extra Individuals.
Questioning should you would possibly qualify to assert this totally refundable tax credit score in 2022? Learn on to search out out!
What’s the Earned Revenue Tax Credit score?
The EITC is a refundable tax credit score for people and households with low to reasonable incomes. Starting in tax yr 2022, this credit score has expanded to working adults age 19 or older (together with seniors 65 and older), no matter whether or not or not they’ve youngsters.
Beforehand, this tax credit score was accessible to people aged 25-64 with out dependents. The brand new guidelines for tax yr 2022 enable extra childless folks to qualify for the credit score.
How a lot is the EITC?
The Earned Revenue Credit score quantity was quickly expanded for 2022, permitting certified childless taxpayers to assert a credit score of as much as $1,502 on their federal revenue tax returns. In 2022, the utmost credit score will drop to $560 for certified childless taxpayers.
The quantity you obtain depends upon your adjusted gross revenue (AGI), tax submitting standing, and what number of children you could have.
The good factor in regards to the EITC is that it’s totally refundable. If the credit score quantity you qualify for is greater than the quantity of tax you owe, you’ll obtain the distinction as a tax refund.
What are the revenue limits for the EITC?
Use your adjusted gross revenue, marital standing, and the variety of children you need to decide how a lot of the Earned Revenue Credit score you might qualify for in 2022.
|Variety of Youngsters
|Max Earned Revenue Credit score
|Max Revenue (single or head of family)
|Max Revenue (married submitting collectively)
Notice: Each your earned revenue (wages, ideas, and internet self-employment revenue) and your AGI (your gross revenue minus any changes) should each be beneath the thresholds listed on this desk.
As you’ll be able to see from the desk above, probably the most one family could make whereas nonetheless retaining eligibility for the Earned Revenue Credit score is $57,414 — that’s for joint married filers with three or extra children. In the meantime, probably the most you might earn as a single filer with out youngsters to assert the credit score is $21,430.
I acquired stimulus cash or advance Youngster Tax Credit score funds final yr. Do these depend as revenue for the EITC?
No, any stimulus funds or advance Youngster Tax Credit score funds you acquired final yr should not counted for revenue functions when claiming the Earned Revenue Tax Credit score.
Further necessities to assert the EITC
Should you meet the IRS revenue necessities, you simply must ensure you additionally meet the next circumstances to qualify for the Earned Revenue Credit score:
- You’ll want to have lived in the USA for greater than half of 2022
- You can’t be claimed as a dependent or qualifying youngster on another person’s tax return
There may be not a most age restrict to assert this tax credit score, however it’s essential to meet the next minimal age necessities relying in your scenario:
- You should be a minimum of 24 should you had been a pupil for a minimum of 5 months in 2022
- You should be a minimum of 18 should you had been in foster care any time after turning 14 or qualify as a homeless youth
- You should be a minimum of 19 in all different circumstances
Modifications to funding revenue and married submitting individually necessities
There are a number of extra EITC modifications you must learn about for 2022 and past. For example, the IRS elevated its restrict for funding revenue — now you can qualify for the Earned Revenue Credit score in case your funding revenue doesn’t exceed $10,000.
Prior to now, should you had been married, you needed to file together with your partner to assert the EITC. Beginning in 2022, in case you are married however separate, you don’t have to file a joint return to qualify for the Earned Revenue Credit score so long as you lived together with your qualifying youngster for greater than half the yr. You will need to additionally meet one of many following necessities:
- You didn’t stay together with your partner for a minimum of the final six months of 2022; or
- you might be legally separated beneath your state’s legal guidelines with both a written separation settlement or a decree of separate upkeep and weren’t residing together with your partner on the finish of 2022
Claiming the Earned Revenue Credit score for 2022
TaxAct® makes it simple to assert the Earned Income Tax Credit in your return. Our step-by-step course of guides you thru your federal and state returns at a tempo that’s best for you and offers you useful solutions tailor-made to your distinctive tax scenario. Try it out and see for your self!