JERSEY CITY, NJ, January 27, 2022 /PRNewswire/ — One of the most important tax credits is one of the most overlooked tax credits: the Earned Income Tax Credit (EITC). To ensure that everyone who qualifies for the EITC gets it, Jackson Hewitt Tax Services® is participating in this year’s EITC Awareness Day, the Friday, January 28, 2022. The EITC is one of the largest tax credits available to eligible taxpayers, valued at up to $6,728 for eligible taxpayers with three or more children.
“The Earned Income Tax Credit is an incredibly valuable credit and according to the IRS, approximately 20% of EITC-eligible taxpayers do not claim it each year. But there are requirements that taxpayers should be aware of, in order to be eligible for the EITC,” said Marc Steber, director of tax information at Jackson Hewitt. “Most importantly, this credit is based on earned income and adjusted gross income. Unemployment benefits are not considered income from work, but are part of adjusted gross income. This means that taxpayers who received unemployment benefits in 2021 could see the amount of their EITC impacted.”
According to the IRS, the maximum EITC amount has increased to the following amounts for 2021, which means taxpayers could get bigger tax refunds than ever before:
- $6,728 – Credit for three or more eligible children (instead of $6,660)
- $5,980 – Credit for two eligible children (instead of $5,920)
- $3,618 – Credit for an eligible child (instead of $3,585)
- $1,502 – Credit for taxpayers without children (instead of $538)
“We want to make sure no one leaves money on the table this year, because there are thousands of dollars in new tax credits. At Jackson Hewitt, we help taxpayers find every credit and deduction they have right, which is why participating in the EITC Awareness Day and raising awareness about credit is important to us, now more than ever,” Steber said.
There are also earned income requirements to be eligible for the EITC which taxpayers can find at jacksonhewitt.com or IRS.gov. For example, married taxpayers declaring jointly must have earned income and adjusted gross income below $57,414, and three or more eligible children (instead of $56,844); while single filers and household heads with three or more eligible children must have earned income below $51,464.
Additionally, due to the American Rescue Plan Act of 2021, major positive changes have been made to the EITC for taxpayers without children for the 2021 tax year. Temporary changes include:
- Previous year earned income rule will be available using only income earned in 2019
- Minimum age is now 19 (was 25)
- Some children who are 18 years old and homeless, or who have “aged out of foster care,” are eligible for the childless EITC, if they meet the other rules
- There is no maximum age (was 65)
- Maximum credit amount increased to $1,502 (from $538)
- Maximum disposal income increased to $21,430 (from $15,820), and $27,380 (from $21,710), if married filing jointly
Permanent changes to the EITC include:
- The maximum investment income limit has been increased to $10,000 (from $3,650) and will be adjusted annually for inflation
- Individuals with dependent children who do not have a valid Social Security number may be eligible for the Childless EITC
- Some married taxpayers filing separately who do not meet the head of household rules may qualify for the EITC without children if:
- They don’t file a joint return
- They did not live with their spouse the last part of the year
- They had an eligible child for more than half the year
- This usually occurs in a context where they pay no more than half the cost of the household and therefore are not eligible for the head of household
For more information on this and other valuable credits, as well as to find a local office near you, taxpayers are encouraged to visit jacksonhewitt.com.
About Jackson Hewitt Tax Service Inc.
Jackson Hewitt Tax Service Inc. is an innovator in the tax industry, with a mission to provide hard-working clients with access to simple, low-cost solutions for managing their taxes and tax refunds. jackson Hewitt is dedicated to helping customers move forward and backs its work with its Maximum Money Back Guarantee® and Lifetime Accuracy Guarantee® (restrictions apply, see the Jackson Hewitt website for details) . Jackson Hewitt has more than 5,500 company-owned franchises and branches nationwide, including nearly 3,000 in Walmart stores, as well as online tax preparation services, allowing customers to file easily and conveniently their tax returns. For more information on products, services and offers, or to locate a Jackson Hewitt office, visit www.jacksonhewitt.com or call 1 (800) 234-1040.
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SOURCE Jackson Hewitt Tax Service Inc.