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Millions of older Americans will be able to claim an earned income tax credit (EITC) when they file their 2021 tax returns this year and Lisa Marsh Ryerson, AARP executive vice president and president of AARP Foundation, told U.S. Vice President Kamala Harris Feb. 8 that AARP will raise awareness about the benefit and continue to urge that the EITC cap be permanently lifted.
“Older workers have been hard hit by the pandemic, and we’re delighted that now people age 65 and older are eligible to receive the EITC for the first time,” Marsh Ryerson said at a White House event designed to promote the changes to the EITC and Child Tax Credit included in the American Rescue Plan of 2021. “But poverty doesn’t go away in one year — this is an important benefit that must continue.”
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Before the changes included in the rescue plan, individuals age 65 and older were not eligible for the EITC. For the 2021 tax year, the legislation lifted that age cap and also tripled the maximum credit for workers without children to $1,502. Workers age 65 and older are projected to total 13 million by 2024 and are the fastest growing age group in the workforce, according to AARP research.
In addition to the federal tax credit, 22 states base their own earned income tax benefit on the federal one. Because of the increased EITC, workers in those states will be eligible for an average of $270 for the 2021 tax year.
“We know that the Earned Income Tax Credit lifts 5 to 6 million people out of poverty, including 3 million children, but about 20 percent of eligible individuals still don’t claim the EITC, including an estimated 5 million in underserved communities,” Marsh Ryerson said. “As a result, more than $7 billion goes unclaimed. That not only hurts these families, but also their communities and local businesses.”
Each year, AARP Foundation’s Tax-Aide program helps low-to-moderate-income taxpayers across the country file their returns for free. Marsh Ryerson said the Tax-Aide volunteers have been trained and certified by the IRS, so they will be able to make taxpayers aware of the changes to the EITC and Child Tax Credit. She also said that AARP Foundation will help support community-based organizations, especially in African American and Hispanic communities, to get the word out about the eligibility expansion of the EITC credit.