Changes to the Earned Income Tax Credit (EITC) mean that additional taxpayers may qualify for this significant tax credit.
Now 11 years old, the EITC last year resulted in almost $67 billion in tax credits for more than 27 million eligible workers and families, with an average EITC amount of $2,455.
Workers who earned $53,505 and less in 2016 may qualify for EITC as they file a tax return this year. The IRS estimates that four out of five taxpayers could benefit from EITC this year. Eligible families with three or more qualifying children could get a maximum credit up to $6,269; while couples without children may qualify for up to $506. Unlike most tax credits, the EITC is refundable, which means even those who owe no tax can receive a refund.
To get the EITC, workers must file a tax return and specifically claim the credit. If you are claiming a child or children, be sure they have valid Social Security numbers. You can learn more about
EITC eligibility
and use the
EITC Assistant
to find out if you qualify at the IRS website.
Keep in mind that the IRS is required by law to hold refunds claiming the EITC and the Additional Child Tax Credit (ACTC) until Feb. 15. The IRS must hold the entire refund, even the portion not associated with EITC or ACTC. So Even direct deposit refunds may not be deposited until the end of February.
The IRS also cautions taxpayers about scams that claim to increase the EITC refund. Scams that create fictitious qualifying children or inflate income levels to get the maximum EITC could leave taxpayers with a penalty.
If you have questions about the Earned Income Tax Credit or any other tax issue, please contact Gray, Gray & Gray's Tax Department at (781) 407-0300.
