When you file your taxes, the hope is often that you can get the most possible money back. And the Earned Income Tax Credit (EITC) may be able to help.
5 things to know about the Earned Income Tax Credit
The Internal Revenue Service (IRS) declared January 25, 2019 as their annual #EITCAwarenessDay.
But how much do you know about this valuable tax credit?
In order to qualify for the EITC, you must have earned income either from working for someone else, being a freelancer or independent contractor or being your own boss and running a business.
So who exactly qualifies for this tax credit?
The EITC is aimed at workers on the low-to-moderate end of the income scale — defined as those who earned $54,884 or less in 2018.
The IRS website offers more granular details based on the number of qualifying children you’re claiming:
In addition, note that your investment income must be $3,500 or less for the year to qualify for this credit.
If you have questions about your specific situation, use the EITC Assistant on the IRS website to determine your eligibility.
The maximum benefit will go to working families
For working families, the EITC benefit tends to be larger — up to $6,431 if you have three qualifying children.
With two qualifying children, you can get $5,716. Only have one child? You could get $3,461.
But single workers can benefit, too
Have an income below $15,270 and no qualifying children?
The IRS says you may be eligible for a smaller credit of up to $519.
Don’t normally file a return? Consider doing it this year
Certain taxpayers aren’t required to file a tax return. Yet even if you don’t owe the IRS or aren’t required to file, the EITC could make it worth your while to file.
Depending on your income and your number of dependents, you could be leaving up to $6,431 on the table if you don’t. Fortunately, filing can be done quickly and easily for free through the IRS Free File program.
Claiming the EITC means you’ll have to wait to get your refund
People who file and claim the EITC will have to play a waiting game with the IRS.
“The IRS expects the earliest EITC-related refunds to be available in taxpayer bank accounts or on debit cards starting on February 27, 2019,” the agency notes online, adding that’s only “if these taxpayers chose direct deposit and there are no other issues with their tax return.”
So your wait could potentially be longer depending on how you chose to file. See our estimated tax refund schedule here.
Here are some more articles you might enjoy from Clark.com:
- 8 big misconceptions about the new tax law
- Here are the new 2019 tax rates & income brackets
- See your estimated 2019 tax refund schedule