(LibertySons.org) – For most individuals, filing taxes isn’t a fun experience. But for others, it’s a welcome event because they may get money back. In addition, many of these people get the Earned Income Tax Credit (EITC). Typically, this break is only available to low-income earners with dependents, but the rules changed for 2021. Now, more people can take advantage of the tax boost, and you don’t necessarily need to have a family anymore to qualify.
EITC and Changes for 2021
The EITC is a federal tax credit aimed at low to moderate earners to give them a boost. Most tax credits like this don’t trigger a refund themselves but merely reduce a person’s tax liability. The credit began under the administration of former President Gerald Ford. Experts say it helps to keep people out of poverty.
For the 2021 tax year only, the EITC will offer a one-time tax break for people who usually don’t qualify for it. For adults with no dependents, the credit amounts triple from the year prior for a credit up to $1,502.
The program had expanded under the American Rescue Plan as a benefit for lower-income workers. It opens the door for people who usually get no or low credit, such as seniors or young adults, to get a boost in their tax returns after the damaging financial effects from the pandemic.
Regular Year Requirements
The general requirements for people with dependents include:
- An income below the set limits, which is $51,464 or less for single people and $57,414 or less for married individuals
- Investment income under $10,000
- No foreign income
A taxpayer must also have a valid Social Security number and be a US citizen or resident alien.
Changes for 2021 Only
The income limits for 2021 also increased for taxpayers without dependents. The limit became $21,430 or less for single taxpayers, and for married individuals, $27,380 or less. People have the option to use their 2019 incomes, which is especially nice for those who lost their jobs due to the pandemic and didn’t earn money in 2020.
The qualifying age for the credit starts at 19 years old unless a person was in the foster system or homeless and has no upper age limit. Individuals under the age of 24 who are in college full-time don’t qualify. The new guidelines open the door for younger workers and seniors, who usually get shut out due to the dependent requirement.
Claiming EITC
To claim EITC, a person must file a tax return. Even if the applicant does not owe taxes, they must claim the credit when filing to get it. Taxpayers should receive the credit as a refund minus any tax payments they owe.
In fact, the vital tax break could provide families and individuals who qualify with a larger refund this year when Americans likely need it the most.
~Here’s to Our Liberty!
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