IR-2023-16, January 27, 2023
WASHINGTON – The Internal Revenue Service and partners nationwide today kicked off their Earned Income Tax Credit Awareness Day outreach campaign to help millions of Americans who earned $59,187 or less last year take advantage of the Earned Income Tax Credit (EITC).
“This is an extremely important tax credit that helps millions of hard-working people every year,” said IRS Acting Commissioner Doug O’Donnell. “But each year, many people miss out on the credit because they don’t know about it or don’t realize they’re eligible. In particular, people who have experienced a major life change in the past year – in their job, marital status, a new child or other factors – may qualify for the first time. The IRS urges people to carefully to review this important credit; we don’t want people to miss out.”
In 2022, 31 million eligible workers and families across the country received about $64 billion in Earned Income Tax Credits, with an average amount of more than $2,000.
The IRS administers the EITC, which Congress originally approved in 1975. It was developed in part to offset the burden of Social Security taxes and provide an incentive to work.
The IRS and partners urge people to check to see if they qualify for this important credit. They also encourage people who don’t normally file a tax return to review whether they qualify for EITC and other valuable credits.
The EITC is a tax credit for certain people who work and have low to moderate income. A tax credit usually reduces tax owed and may also result in a refund. Even though millions of people get the EITC, the IRS estimates that about 20% of EITC eligible taxpayers do not claim it.
Workers at risk for overlooking the EITC include those:
- Living in non-traditional homes, such as a grandparent raising a grandchild
- Whose earnings declined or whose marital or parental status changed
- Without children
- With limited English skills
- Who are veterans
- Living in rural areas
- Who are Native Americans
- With earnings below the filing requirement
The IRS also reminds taxpayers that the quickest way to get a tax refund is by filing an accurate tax return electronically and choosing direct deposit for their refund. Tax software, tax professionals and other free options can help people see if they qualify for the EITC.
Who can get the EITC?
To qualify, taxpayers must meet certain requirements and file a tax return, even if they did not earn enough money to be obligated to file a tax return. There’s no need to guess about EITC eligibility; find out with the EITC Assistant.
Workers with qualifying children may be eligible for EITC if their adjusted gross income (AGI) was less than $53,057 in 2022 ($59,187 for married filing jointly). These individuals can receive a maximum of $6,935 in EITC, up from $6,728 in 2021.
The maximum EITC for taxpayers with no dependents is $560, available to filers with an AGI below $16,480 in 2022 ($22,610 for married filing jointly), and it can be claimed by eligible workers between the ages of 25 and 64. Married but separated spouses who do not file a joint return may qualify to claim EITC if they meet certain requirements.
EITC is for workers whose income does not exceed the following limits in 2022:
- $53,057 ($59,187 married filing jointly) with three or more qualifying children who have valid Social Security numbers (SSNs).
- $49,399 ($55,529 married filing jointly) with two qualifying children who have valid SSNs.
- $43,492 ($49,622 married filing jointly) with one qualifying child who have valid SSNs.
- $16,480 ($22,610 married filing jointly) with no qualifying children who have valid SSNs.
- Investment income must be $10,300 or less.
How to claim the EITC
To get the EITC, workers must file a tax return and claim the credit. Eligible taxpayers should claim the credit even if their earnings were below the income requirement to file a tax return. Free tax preparation help is available online and through volunteer organizations.
Those eligible for the EITC have these options:
- Free File on IRS.gov. Free brand-name tax software is available that leads taxpayers through a question-and-answer format to help prepare the tax return and claim credits and deductions if they’re eligible. Free File also provides online versions of IRS paper forms, an option called Free File Fillable Forms, best suited for taxpayers comfortable preparing their own returns.
The IRS reminds taxpayers to be sure they have valid Social Security numbers for themselves, their spouse if filing a joint return and for each qualifying child claimed for the EITC. The SSNs must be issued before the April due date of the return. There are special rules for those in the military or those out of the country.
Most EITC refunds deposited by late February
While the IRS began accepting 2022 returns on January 23, 2023, the IRS cannot issue a refund that includes the Earned Income Tax Credit or Additional Child Tax Credit (ACTC) before mid-February. This is due to the 2015 PATH Act law passed by Congress, which provides this additional time to help the IRS stop fraudulent refunds from being issued.
Where’s My Refund? should show an updated status by February 18 for most early EITC/ACTC filers. The IRS expects most EITC/ACTC related refunds to be available in taxpayer bank accounts or on debit cards by February 28 if taxpayers chose direct deposit and there are no other issues with their tax return.
Get it right
Taxpayers are responsible for the accuracy of their tax return even if someone else prepares it for them. Since the rules for claiming the EITC can be complex, the IRS urges taxpayers to understand all of them.
Look out for scams
Be sure to choose a tax preparer wisely. Beware of scams that claim to increase the EITC refund. Scams that create fictitious qualifying children or inflate income levels to get the maximum EITC could leave taxpayers with a penalty.
Visit IRS online to learn about other tax credits
IRS.gov is a valuable first stop to help taxpayers get it right this filing season. They can check to see if they also qualify for the Child Tax Credit, Additional Child Tax Credit or Credit for Other Dependents.