Earned Income Tax Credit Calculator 2022 & 2023

The Earn Income Tax Credit or EITC credit calculator is built by considering various eligibility conditions, income limits, and phase-out thresholds for the tax years 2022 and 2023. The earned income credit law is provided under section § 32(b) of 26 US Code.

What’s earned income tax credit?

The earned income tax credit or the EITC is a refundable tax credit given automatically when a low-income wage/salary earner fils a tax return and fulfills certain conditions set by IRC 32(b). Since the EITC credit is refundable, it means that if there is any net balance after adjusting the tax liability for the year, the balance will be refunded by IRS to you. Therefore, in many cases, when the low wage earners have a very low tax liability or nil liability, the whole of the EIC credit will be credited to their bank accounts.

Earned Income Tax Credit Calculator for 2022 & 2023

Is EIC refundable ?

Yes, the Earned Income Tax Credit (EIC) is a refundable tax credit. This means that even if the credit exceeds the amount of taxes owed, the taxpayer can still receive a refund for the difference. For example, if a taxpayer owes $500 in taxes but is eligible for a $1,000 EIC, they would receive a refund of $500.

Is EITC refund delayed?

Yes, generally. IRS scrutinizes the tax return claiming the earned income tax credit because there are many eligibility conditions attached to the EITC credits. IRS needs to follow the law Protecting Americans from Tax Hikes (PATH Act) that provides that the refund claim due to the EITC or ACTC can not be issued by the IRS before mid-February. In fact, the claim of EITC may trigger an IRS audit. So, our refund date tax calculator does not work for the EITC refund cases.

Who are eligible for earned income tax credit?

Following are the conditions for claiming EITC on 2022 (filing April 2023) & 2023 (Filing April 2023 )tax returns:

• Your investment income was $10,600 or less during the tax year 2022 and $11.000 for the tax year 2023
• You must have worked and earned income under a threshold as given below in the 2022 and 2023 charts.
• You must have a valid Social Security number (SSN)  by the due date of your 2021 return (including extensions)
• You must be a U.S. citizen or a resident alien all year
• You did not file Form 2555 (related to foreign earned income)

2022 EITC Max Credit & Phaseout Threshold

In the case of the tax year 2022, it must be noted that the Build Back Better Act (BBBA; H.R. 5376) passed on November 19, 2021, extended the 2021 expansion of the earned income tax credit (EITC) through the American Rescue Plan Act (ARPA, P.L. 117-2) for taxpayers without qualifying children for one year—2022. So, BBBA extended the maximum credit available to childless taxpayers to $1,502 from $600 and also brought in relaxation in age for the claimants.

2023 EITC Max Credit & Phaseout Threshold

What is the age limit for claimants of EITC credit?

The general rule on the age of the low-income earner is that the minimum age should be 25, and the maximum age of the claimant is 64 years. The ARPA, or American Rescue Plan Act, relaxed the age for the tax year 2021. But the said relaxation was for only tax year 2021. As such, for the tax year original provision as provided in I.R.C. § 32(n)(1)(B) relaxed age for the claim of EITC during the tax year 2022 is :

• 19 years for most workers
• 24 years for part-time students
• 18 years for former foster youth and homeless youth
• The maximum age of the claimant should be 64 Years

You can also check the EIC table.