Tax Refund 2022: You Could Miss Out on $6,728 by Not Claiming the Earned Income Tax Credit

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The Earned Income Tax Credit is one of largest tax credits you can receive every year, but often overlooked come tax time. The credit is intended for low-to-moderate-income families to provide financial relief and allow for larger tax refunds the larger the number of family members.

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The IRS claims that one in five eligible taxpayers do not claim the credit and miss out on money they are entitled to every year. The EITC is only available to those who file a tax return every year. However, the rules have changed this year, and the EITC is worth as much as $6,728 for a family with three or more children — that’s up to $1,502 for taxpayers who do not have a qualifying child, the IRS stated. Your exact amount depends on whether or not you owe any taxes. If the amount of the EITC you are owed is greater than your tax bill, then you will receive the difference.

In order to be eligible to claim the EITC on a 2021 tax return, you must have worked and earned income under $51,464. If married, filing jointly this number increases to $57,414. Your investment will also need to have been under $10,000 during 2021 and you did not file a foreign earned income statement. You will need to have a valid Social Security number by the due date of your 2021 tax return and have been a U.S. citizen or resident alien during the entirety of 2021.

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The only way to receive this credit is to file a tax return, which means that even if you do not make enough money to file a tax return ordinarily, but believe you meet all of the eligibility requirements, then you must still file for 2021 in order to receive the money in your refund.

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About the Author

Georgina Tzanetos is a former financial advisor who studied post-industrial capitalist structures at New York University. She has eight years of experience with concentrations in asset management, portfolio management, private client banking, and investment research. Georgina has written for Investopedia and WallStreetMojo. 

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