Working individuals may be unaware that they qualify for potential tax breaks. Many taxpayers who have a limited earned income overlook the Earned Income Tax Credit (EITC).
What Is EITC?
The Earned Income Tax Credit (EITC) lowers the amount you owe in federal taxes and could even mean you will receive a refund.
This tax break is in fact readily available. However, the Internal Revenue Service (IRS) states that many remain unaware of it. A significant number of those who qualify fail to claim the credit. As of tax year 2020, nearly25 percentof qualifying taxpayers did not claim the EITC.
In fact, the IRS even observes an annualEITC Awareness Dayin an effort to turn these numbers around. Each year in January, the IRS partners with organizations and legislators nationwide to spread awareness of this tax break.
As a Person With a Disability, Am I Eligible for the Earned Income Tax Credit (EITC)?
Taxpayers who may benefit from the Earned Income Tax Credit include those with yearly earnings that fall under a certain limit. (See more information in the next section.)
The rules for qualifying for EITC can be somewhat complicated. Whether you are eligible depends not only on your earned income but other factors as well. These include your filing status and the size of your family.
You do not have to have a child to qualify for this tax break. However, any children you do claim on your tax return must meet certain criteria.
You also cannot have had more than $11,600 in investment income in 2024.
Note that the IRS does offer a free online calculator, theEITC Assistant, that can show you whether you can claim this tax credit.
What Is the EITC for Tax Year 2024?
Individuals who are not claiming any dependents must have earned $18,591 or less in 2024 to qualify for this tax credit. For married couples filing jointly with no qualifying dependents, this threshold is $25,511.
If you are an individual taxpayer claiming one dependent, you must have earned $49,084 or less. If filing jointly with one qualifying dependent, the earned income limit goes up to $56,004.
For more information and to view the complete EITC Table for tax year 2024, visit IRS’EITC webpage. This resource will also show you the maximum amount of credit you can receive, depending on your situation. For example, with three or more qualifying children and a modest income, your credit could be as high as $7,830 for tax year 2024.
Keep in mind that the IRS generally cannot issue EITC refunds, under current law, until after mid-February.
Helpful Resources During Tax Season
Don’t forget that households earning less than $60,000 a year may also seek out free assistance with preparing their federal tax return. Volunteers run programs like theVolunteer Income Tax Assistance(VITA) Program. Read more about this and other forms of assistance inthis article, and locate aTaxpayer Assistance Centeroffice near you.
Other tax breaks may be available to you if you are living with a disability. If you aren't sure what tax breaks you may qualify for, seek out the counsel of a qualified special needs planner.