The Earned Income Tax Credit (EITC) is a refundable tax credit given to taxpayers that earn a low-to-moderate income from a job or through self-employment. According to the IRS, around 25 million eligible filers received this credit in 2020 and the average EITC was approximately $2,461. However, many eligible taxpayers are missing out on this tax break, the IRS reports that an estimated 1 in 5 eligible taxpayers miss out on this credit because they either don’t know about it, don’t know how to claim it, or aren’t sure of who to consult for trustworthy help with their taxes.
In order to get the credit, you must file your federal taxes this year. Generally, you may be eligible for the EITC if you meet the income limits and:
– You are a U.S. citizen
– You are over the age of 25 or have qualifying children
– You do not file as “married filing separately”
– You have earned income from employment.
– Unemployment income does not qualify.
Your income and number of qualifying children will determine the amount you receive through the EITC. If your income was higher in 2019 than it was in 2020, you can use the 2019 amount to calculate your EITC for 2020. .For the tax year 2020 the maximum credits are as follows:
– $6,600 with three or more qualifying children
– $5,920 with two qualifying children
– $3,584 with one qualifying child
– $538 with no qualifying children.