Tax Basics: Earned Income Tax Credit

 

Earned-Income Tax Credit

Hi there— Today's Tax Basics topic is over the Earned Income Tax Credit. You may recognize it being referred to as EIC or EITC.     What is EIC? Earned Income Credit is a refundable credit geared towards low-to-moderate income households. The tax credit was created to help reduce the amount of tax owed by LMI workers.   How do I get the EIC?  The EIC is gauged on your earned income, AGI and your filing status. Unlike the Child Tax Credit, you do not have to have a qualified dependent in order to qualify for EIC. However, the credit amount does increase for each dependent claimed, as long as they are a qualifying dependent and your income stays within the thresholds.    How is much will my income be taxed? Follow the link above and use the charts to find your income level on the chart that reflects your filing status. Here is an example of how it will be taxed:   If you are a taxpayer filing jointly and make $83,000 you would fall into the 22% tax bracket. Meaning that the first $19,900 of your income is taxed at 10%, income between $19,901 and $81,050 at 12%, and the remaining $1,950 at 22%.

What else is there to know? Click the button below to see a list of temporary and permanent changes to EIC.

EIC Updates

If you think you may qualify for the EIC and/or have questions, let us know! Talk again to you soon, friend!

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