The Inside Income Service posted a set of solutions Wednesday to steadily requested questions on the Earned Revenue Tax Credit score.
The brand new EITC FAQ web page goals to offer info to eligible taxpayers on tips on how to correctly declare the credit score after they put together and file their 2021 tax return.
The EITC helps low- to moderate-income employees and households by giving them tax credit to both lower the quantity of taxes they owe or providing an added cost to extend a tax refund. The quantity of the credit score can change relying on whether or not the taxpayer has youngsters, dependents, is disabled, or meets different standards.
The brand new FAQs spell out what the EITC is, the way it was expanded for 2021, which taxpayers are eligible, and tips on how to declare it. For 2021, extra employees with out qualifying youngsters can qualify for the EITC as a result of the utmost credit score has almost tripled for eligible taxpayers and, for the primary time, it’s out there to youthful employees and now has no age restrict cap. For 2021, the EITC is mostly out there to filers with out qualifying youngsters who’re at the least 19 years previous with earned earnings under $21,430, or $27,380 for spouses submitting a joint return. The utmost EITC for filers with no qualifying youngsters is $1,502. One other change for 2021 permits people to calculate the EITC utilizing their 2019 earned earnings if it was increased than their 2021 earned earnings. In some circumstances, this selection will give them a bigger credit score.
IRS headquarters in Washington, D.C.
Andrew Harrer/Bloomberg
The 17 new FAQs embrace:
- What Is the Earned Revenue Tax Credit score?
- What’s earned earnings?
- What are the earned earnings limits for taxpayers with out qualifying youngsters?
- How previous should I be to assert the Earned Revenue Tax Credit score if I wouldn’t have qualifying youngsters?
- Do I have to have a Social Safety quantity (SSN) to be eligible to assert the Earned Revenue Tax Credit score?
- Do my qualifying youngsters have to have SSNs to ensure that me to assert the Earned Revenue Tax Credit score?
- What are the age necessities for claiming the Earned Revenue Tax Credit score if I’ve a qualifying youngster?
- What are the earned earnings limits for people with a qualifying youngster?
- Will any refund that I obtain as a result of I claimed the Earned Revenue Tax Credit score have an effect on my authorities advantages?
- What’s the most quantity of the Earned Revenue Tax Credit score for 2021 for eligible taxpayers with out qualifying youngsters?
- Is there a restrict on the quantity of funding earnings I can earn and stay eligible for the Earned Revenue Tax Credit score?
- If I’m not submitting a joint return with my partner, can I declare the Earned Revenue Tax Credit score?
- Who is taken into account a professional homeless youth for functions of the Earned Revenue Tax Credit score?
- Who is taken into account a professional former foster youth for functions of the Earned Revenue Tax Credit score?
- Can I elect to make use of my 2019 earned earnings to determine my Earned Revenue Tax Credit score for 2021?
- Can a scholar declare the Earned Revenue Tax Credit score for 2021?
- What’s a specified scholar for functions of the Earned Revenue Tax Credit score?