Last week, the IRS held its annual Earned Income Tax Credit Awareness Day to assist millions of taxpayers in taking advantage of the tax break. However, the National Taxpayer Advocate(NTA) is calling out the Internal Revenue Service saying that some of the benefits pointed out expired and do not apply to this upcoming tax season. The NTA expects the average tax refund to decrease this year as a result of these changes.
Overview
Independent filers that earned less than $53,057 are still eligible to claim the EITC. The same applies to married filing jointly filers who earned $59,187 or less. The maximum amount that can be received on the Earned Income Tax Credit is $560. This amount will be available to independent filers whose 2022 income was below $16,480. The same applies to married people filing jointly that made less than $22,610 in 2022.
All eligible workers between the ages of 25-64 can claim the EITC. Married but separated filers are also allowed to apply for the credit, but they must meet certain requirements.
EITC Income Brackets
For the upcoming tax season, the Earned Income Tax Credit is for workers whose income did not exceed the following limits in the tax year 2022. The investment income of the filer must also be $10,300 or less.
- $53,057 ($59,187 married filing jointly) with three or more qualifying children who have valid Social Security numbers;
- $49,399 ($55,529 married filing jointly) with two qualifying children who have valid SSNs;
- $43,492 ($49,622 married filing jointly) with one qualifying child who has a valid SSN; and,
- $16,480 ($22,610 married filing jointly) with no qualifying children who have valid SSNs.
IRS Commissioner Statement
In a statement made by acting IRS commissioner Doug O’Connell, he noted the importance of this credit to taxpayers.
“This is an extremely important tax credit that helps millions of hard-working people every year. But each year, many people miss out on the credit because they don’t know about it or don’t realize they’re eligible. In particular, people who have experienced a major life change in the past year — in their job, marital status, a new child, or other factors — may qualify for the first time. The IRS urges people to carefully review this important credit; we don’t want people to miss out.”
Wrap Up
Last tax season, approximately 31 million American taxpayers across the U.S. received roughly $64 billion in EITC claims, the average amount being around $2,000. With many people taking advantage of this credit, call your accountant or advisor to find out if you or a loved one are eligible to claim the Earned Income Tax Credit this upcoming tax season.