The Earn Income Tax Credit or EITC credit calculator is built by considering various eligibility conditions , income limits and phase out thresholds for tax year 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 automaticall when a low-income wage/salry earner fils 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, balance will be refunded by IRS to you. Therefore , in many cases when the low wage earners have 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 EITC refund delayed ?
Yes, generally . IRS scrutinize 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 , claim of EITC may trigger IRS audit. So, our refund date tax calculator does not work for the EITC refund cases.
Who are earned income tax credit eligible?
Following are the conditions for claiming EITC on a 2022 (filing April 2023) & 2023 (Filing April, 2023 )tax return:
- Your investment income was $10,600 or less during tax year 2022 and $11.000 for tax year 2023
- You must have worked and earned income under a thresold as given below in 2022 and 2023 chart.
- 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 case of 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 tax paers to $1,502 from $600 and also brought in relaxation in age for the claimaints.
|No of Children||Maximum Credit Possible||Minimum Earning Required||Maximum AGI |
above which you don’t get eitc
|Maximum AGI |
above which you dont get eitc
|Phaseout Begins||Phaseout Begins|
|All others||Married Filing |
|All others||Married Filing Jointly|
|Three or More||6,935||15,410||53,057||59187||20130||26260|
2023 EITC Max Credit & Phaseout Threshold
|Children or Relatives Claimed||Max Credit||Minimum Earning||Maximum AGI above which you dont get eitc||Maximum AGI above which you dont get eitc||Phase Out begins||Phase Out begins|
|Minimum Earning||All others||Filing as Married Filing Jointly||All others||Filing as Married Filing Jointly|
|Three or More||7430||16510||56838||63398||21560||28120|
What are the age limit for claimant of EITC credit ?
The genral rule on age of the low income earner is that the minimum age should be 25 and maximum age of the claimant is 64 years. The ARPA or American Rescue Plan Act relaxed the age for tax year 2021 . This was extended to year 2022 through BBBA . So the relaxed age for claim of EITC during tax year 2022 is
- 19 years for most workers
- 24 years for part-time students
- 18 years for former foster youth and homeless youth
- Maximum age is 64 Years, but for 2022, there is no restriction.