$7,430 credit from the IRS: Requirements and who is eligible to receive the refund
Tax season is officially underway and the Internal Revenue Service is urging filers to check if they are eligible for one of the most often overlooked tax credits.
The Earned Income Tax Credit is a tax break for low to moderate earners with higher amounts available for those with children. According to the most recent IRS figures, about 23 million workers and families received about $57 billion in EITC for tax year 2022 with an average amount received of $2,541.
The IRS estimates about 20% of eligible taxpayers don’t claim the credit, however.
READ MORE: IRS starts accepting tax returns today: How long will it take to get your refund?
Who is eligible?
To claim the EITC, workers must meet certain requirements and file a tax return, even if their income level falls below the threshold that would require them to file. Income thresholds are $56,838 for individuals and $63,398 for married filing jointly with investment income of less than $11,000 for the tax year. Other requirements include a valid Social Security number, being a U.S. citizen not filing Form 2555 reporting foreign income.
Here are income thresholds and credit amounts for this year:
- No children with adjusted gross income of up to $17,640 for single filers or $24,210 for joint filers – $600 maximum credit.
- One child with AGI of up to $46,560 for single filers or $53,120 for joint filers – $3,995 credit
- Two children with AGI of up to $52,918 for single filers or $59,478 for joint filers – $6,604 credit
- Three or more children with AGI of up to $56,838 or $63,398 for joint files – $7,430 credit
The maximum EITC is up from $6,935 in 2022.
Refund delays
Claiming EITC or the Additional Child Tax Credit can delay your tax refund.
Federal law requires additional checks to prevent identity theft for filers claiming the credits. While most tax refunds are available within three weeks, EITC or ACTC filers won’t receive their refunds until at least Feb. 27 if taxpayers chose direct deposit and there are no other issues with the tax return.
The IRS Where’s My Refund? will be updated by Feb. 17 for credit filers.