The earned income credit, which may also be referred to as the Earned Income Tax Credit (EITC) is a refundable tax credit aimed at lower to middle-income families. The philosophy behind it is to help people avoid becoming impoverished while also encouraging people to work.
Our guide is going to show you how much the credit is worth and how to use the earned income credit calculator to figure out how much you could be owed this year.
What is the Earned Income Tax Credit?
The EITC is based on how many children you have and how much you make per year. The maximum amount you can get from this credit is $6,660 for the 2020 tax year, which is a moderate increase from 2019.
However, most people won’t be able to claim the full tax credit. To claim the maximum amount, your income must be below $50,594 for a single taxpayer or $56,844 for a married taxpayer filing jointly. You must also have more than two qualifying children.
However, even low-income families with no children can take advantage of the EITC. Single taxpayers need an income of below $15,820, and married taxpayers filing jointly need an income of under $21,710.
Try the Earned Income Credit Calculator
It couldn’t be easier to find out how much you could be owed this year. Use the earned income credit calculator and just answer a few questions to get an estimate of how much you could be entitled to.
It’s a step-by-step calculator with clear instructions, so anyone can use it.
Is the Earned Income Tax Credit Refundable?
The EITC is considered one of the most valuable tax credits for poorer Americans because it’s fully refundable. The chances are if you qualify for this credit, your Federal tax bill won’t be high and may even be as low as zero when other credits and deductions are considered.
So, it could be worth thousands of dollars to you this tax season.
That’s why you can’t get this wrong, or you could be losing out.
How Do I Claim the Earned Income Tax Credit?
First, you should use the earned income credit calculator from mentioned above to find out how much you could be entitled to. The next step is to make sure you claim any dependents via your Federal taxes.
You’ll only be entitled to the EITC if you’ve claimed your children as dependents on your tax form. However, keep in mind that each child can only be claimed once per year on a single tax form, so you may need to coordinate if you happen to be divorced.
Let online tax filing handle this for you. They have all the forms you need, and they make it easy to claim the earned income tax credit.
Last Word – How Much Could You Be Owed?
Through the earned income tax credit calculator, you’ll discover how much you could be entitled to this year.
Don’t lose out on thousands of dollars. Find out how much you could be owed today!