Maximize Your Clients' Benefits with the Earned Income Tax Credit (EITC)
The Earned Income Tax Credit (EITC) is an important tax credit to remember as Tax Professionals. This credit is designed to provide financial assistance for low- to moderate-income workers and families by reducing their tax liability and, in some cases, providing a refund.
Eligibility Criteria for the EITC
To qualify for the credit, the taxpayer must have earned income from working for someone else or from self-employment. The amount of the credit depends on the taxpayer's income and the number of children they have. The more a taxpayer earns and the more children they have, the higher the credit.
They must also meet the requirements with their filing status. The EITC is available to single taxpayers, married filing jointly, head of household, or qualifying widow(er) with a dependent child. It is important to note that non-citizens, including those with a work permit, are no longer eligible for the credit if they do not have a Social Security number.
In addition to the eligibility criteria, there are also income limits for the EITC. The maximum income limit is now $50,000 for single filers and $75,000 for joint filers. Taxpayers who earn above these limits may no longer be eligible for the credit. The age limit for this credit has also been increased from 65 to 67, which may exclude some older workers from qualifying.
As a tax professional, it's essential to keep these criteria in mind and help your clients understand the requirements for the EITC.