Although an incredible number of families currently claim this valuable tax break, the IRS says many more qualify for this refundable tax credit yet neglect to take advantage of it. The guidelines for (EIC) Earned Income Credit Table were recently increased; therefore, many more families meet the requirements and can claim the earned income credit. Take a couple of minutes to ensure you don’t pass up a credit that might provide you with a bigger refund check.
Table of Contents
How Much are the EIC, Earned Income Credit Table Amounts for 2023, 2024?
The amounts for the Earned Income Credit can be found in the chart below:
|Number of Dependents||Max EIC Credit||
Maximum Adjusted Gross Income
How Do I Calculate My Earned Income Credit Amount?
When you file online, your Earned Income Credit amount is automatically calculated on IRS form 1040. If you would like to know the amount of your tax refund using the credit, you can use the free tax calculator to find out.
How Do I Claim the Credit?
For those who are married filing jointly, have 3 or more children, and made under $56,844 ($50,594 for individuals,) you probably qualify for this tax credit. You can claim the Earned Income Tax Credit (EITC) if your income meets the table requirements. The credit decreases all federal income tax you currently owe, dollar-for-dollar. If the credit totally wipes out your tax bill and some credit remains, you will get a cash tax refund for the outstanding amount.
Who Qualifies for the Earned Income Credit?
To begin with, you must meet the requirements. After that, your earnings must be within indicated limits. Lastly, for those who have at least one child, they must qualify too in order to get a bigger credit. Once you pass all of these checks, you can get a credit of up to $6,660 based on your earnings as well as the number of children you have. You are eligible when:
- You have revenue from earnings (such as, from employment, your personal business, union strike benefits, and selected long-term disability benefits).
- You did not earn over $3,650 in interest or dividends, or earnings from rentals, royalties or stock along with asset earnings in the tax year.
- You are single or, if married, do not use the Married Filing Separate option.
- You, your wife or husband, and your children, if qualified, all have Social Security numbers.
- You, together with your spouse, are not regarded as a child on somebody else’s tax return for reasons of the earned income credit.
- You are not cutting out any money you earned overseas on your return.
- You are a citizen or resident of the United States of America.
- You have dependents.
- You do not have an eligible child, however, you and your husband or wife are between 25 and 65, not the dependents of other people, and you have resided in the USA for over 6 months.
How Much Money Can You Make to Qualify for the Earned Income Credit?
Your credit amount will depend on the number of qualifying children you have and how much money you earned. Those that have the lowest earnings are eligible to claim the largest credits. Those that have earnings above the phase-out limit are eligible for lesser credits until they get to the stage where the credit is removed altogether. The guidelines were liberalized to trigger increased credits for quite a few families, particularly those with 3 or more eligible children. This credit is aimed at families with modest earnings, therefore if you make “too much” you might not be eligible. Exactly how much are you able to make and still meet the criteria can be found in the table above.
Does My Child Qualify?
To be eligible, the child has to be:
- Your son, daughter, stepchild, adopted child, or descendant.
- Your foster child was transferred to you by an official agency or court ruling.
- Your brother, sister, stepbrother, stepsister, or a descendant of one of them.
- Age 18 or under as of the year’s end (except if they are a full-time student, in which scenario the student has to be 23 or younger). Exclusion: An individual that is irreversibly and completely handicapped at any time throughout the year is eligible, irrespective of their age.
- A resident living with you in the USA for over 6 months.
You and your sister are living with each other. You are 30, but your sister is 15. When your mother and father passed away 2 years before, you took over the care of your sister, except you did not actually adopt her. She is regarded as an eligible child since she resided with you for over half of the year.
Who is a Qualified Foster Child?
With regard to the Earned Income Credit, a foster child is considered someone who is transferred to you by an official placement agency or court ruling. The child should have resided with you for more than 6 months.
What About My Welfare Benefits?
The Earned Income Tax Credit does not have any impact on particular welfare benefits. Any kind of tax refund you get due to the EITC is not regarded as income when figuring out if you qualify for, or the amount of money you can get from, the following benefit programs:
- Temporary Assistance for Needy Families (TANF)
- Medicaid and Supplemental Security Income (SSI)
- Food stamps
- Low-income housing
IRS Announcing Changes to Earned Income Tax Credit
Changes to Earned Income Credit Table (EITC) will be announced over the summer months and into the fall of 2018. On December 18, 2015, an act entitled Protecting Americans from Tax Hikes Act of 2015 (also known as PATH Act) was enacted for the benefit of taxpayers and taxpayer families. In this law, Section 201 requires that credits or refunds cannot be released to taxpayers before February 15 of any tax year. The changes took effect on January 1, 2017. Additional time is given to prevent lost funds occurring from identity theft or refund fraud in regards to withholdings and/or fabricated wages. The regulations regarding the PATH Act and receiving tax refunds or credits early are:
- Partial refunds will not be issued. Entire refunds will be held until all credits and refunds are verified.
- There are no changes to the way that tax returns are prepared for either professional tax preparers or individuals.
- The average issuance time for tax refunds will remain an estimated 21 days or less, with no refunds being issued before February 15, when EITC and ACTC are involved.
According to the IRS, the plan is to educate taxpayers with the assistance of IRS partners and stakeholders regarding the changes to EITC refund/credit policy. This additional step is to assist the IRS ensures that all taxpayers are provided the refunds they are due. Updates regarding the table changes will begin to be available on the IRS.gov website.
Is the Earned Income Credit Refundable?
The Earned Income Credit is one of the most beneficial tax credits available today. It’s fully refundable, so you can get money from the Federal government even if you don’t owe them anything. You need to be between the ages of 25 and 65 to qualify for the credit. The maximum credit you can claim is $6,660 for the tax year. It’s beneficial for lower- and middle-income earners. A married couple with three children who have $56,844 in adjusted gross income could get the full benefit. However, there are a lot of variations involved.
How to Calculate the Earned Income Credit
You should make sure you use the earned income credit calculator to figure out how much you can get so you don’t miss out on any opportunities. Furthermore, you should always make sure that you file electronically so you can get your credit faster. Take note that from the next tax season, these credits will be withheld to reduce the event of fraud. So even if you file early, you won’t be able to get your credit until the withholding date expires. Remember, if you file online, they will ask you the correct questions to help you claim the EIC tax credits you qualify for and guarantee you will receive the largest refund ever.