Taking Advantage of the Earned Income Credit - TIME BUSINESS NEWS
Taking Advantage of the Earned Income Credit
The earned income Tax credit, or EITC is a refundable tax credit available to low and middle-income families. It was created with the intention of helping people avoid poverty while also encouraging them to work. In this article, we will show you how much the earned income credit is worth and how you can use our earned income credit calculator to figure out what your potential refund may be for next year!
The earned income tax credit, often called the EITC, is a credit given to those who work in the United States and have earned income. The maximum amount available for this credit in 2020 is $6,660, which is a modest increase from 2019.
However, the great majority of individuals will not be eligible for the full tax credit. Your income must be less than $50,594 for a single person or $56,844 for a married couple filing jointly to receive the maximum benefit. You must also have more than two qualifying children.
The Earned Income Tax Credit, however, is available to all low-income families with no children. Single individuals must have an income of less than $15,820 per year, and married couples filing jointly must have less than $21,710.
It’s extremely simple to determine how much you may be eligible for this year. To obtain a rough estimate of how much you might get, answer a few questions using the earned income credit calculator. It’s a step-by-step calculator with easy-to-understand instructions, so everyone can use it.
The EITC is one of the most beneficial tax credits for low-income people since it is completely refundable. If you qualify for this credit, your Federal tax bill is likely to be low and perhaps even zero when other credits and deductions are taken into account.
To know how much you may be entitled to, use the earned income credit calculator from above. After that, make sure you claim any dependents on your Federal taxes.
The EITC is only available if you’ve designated your children as dependents on your tax return. However, keep in mind that each kid can only be listed once per year on a single tax form, so you may need to coordinate if you’re divorced.
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