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Boost Your Refund With the Earned Income Tax Credit

Low- to moderate-income taxpayers under 65 may be eligible for often-overlooked tax break

spinner image A handwritten page of EITC (Earned Income Tax Credit) numbers on a desk with money and a calculator
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If you have modest income, you may be able to give yourself and your family some extra money with the Earned Income Tax Credit (EITC). Last year, 31 million workers and families received the EITC, and got an average $2,043 credit from their 2021 tax returns. In addition, many states have their own EITC for state income taxes, which, combined with the federal EITC, could lower your tax bill — or increase your refund — dramatically.​

A big credit for taxpayers younger than 65

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Tax deductions lower your taxable income, which, in turn, lowers your income tax bill. That’s good. But tax credits reduce your taxes dollar-for-dollar, which is very good. If you had a $500 tax bill and received a $300 credit, your tax bill would shrink to $200.

The EITC is what’s called a refundable tax credit, and refundable tax credits are a thing of wonder: They can turn a tax bill into a tax refund, or a refund into a bigger refund. For example, let’s say you owed $100 in taxes but had a $500 EITC credit. You’d get a $400 refund from the Internal Revenue Service.

The EITC is no longer available to people 65 and older, as it was for the 2021 tax year, a provision that AARP strongly opposes. “Placing an age cap on the EITC is a blatant form of age discrimination,” says Holly Biglow, a government affairs director at AARP focused on older workers. “Older workers should not lose a valuable credit simply because they turn 65. Congress must act to end this legal form of age discrimination and ensure older workers have access to the same tax credits as their younger counterparts,” Biglow says.

The EITC is aimed at workers with low income, and particularly those with qualified children, although you can claim the EITC if you don’t have a child. To qualify, you must have worked and earned income of less than $59,187 in the 2022 tax year. You must have had investment income of less than $10,300. You must have a valid Social Security number and you must have been a U.S. citizen or resident alien all year.

Qualified children must be under the age of 19, or, if a student, under 24. There is no age limit for permanently disabled children. The child must be your son, daughter, grandchild, stepchild or adopted child; younger sibling, step-sibling, half-sibling or their descendant; or a foster child placed with you by a government agency. The child must also have lived with you for at least half the year.

There are also income limits on who can get the EITC. For the 2022 tax year, those limits are:

  • $53,057 ($59,187 married filing jointly) with three or more qualifying children who have valid Social Security numbers ​
  • $49,399 ($55,229 married filing jointly) with two qualifying children who have valid Social Security numbers ​
  • $43,492 ($49,622 married filing jointly) with one qualifying child who has a valid Social Security number​
  • $16,480 ($22,610 married filing jointly) with no qualifying children who have valid Social Security numbers ​

The EITC credit can be as high as:

  • $6,935 with three or more qualifying children​
  • $6,164 with two qualifying children
  • $3,733 with one qualifying child​
  • $560 with no qualifying child
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​​State EITC credits

According to the Center on Budget and Policy Priorities (CBPP), 31 states, as well as the District of Columbia and Puerto Rico, all have EITC programs for state taxes. Some state EITC programs offer refundable tax credits; others do not. The CBPP map will tell you if your state has an EITC program. ​

Most state EITCs are calculated as a percentage of the federal EITC. If you need help calculating the EITC, there are several programs, such as AARP Foundation Tax-Aide, that will help you with federal and state taxes at no cost. ​

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