IRS FAQ Explains Earned Income Tax Credit 2021

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IRS

WASHINGTON – The Internal Revenue Service released today frequently asked questions (FAQ) for earned income tax credit 2021 to advise eligible taxpayers on how to properly claim the credit when preparing and filing their 2021 tax return.

The Earned Income Tax Credit (EITC) helps low-to-moderate income workers and families in the form of a credit to reduce taxes owed or an additional payment to increase a tax refund. The amount of the credit may change if the taxpayer has children, dependents, is disabled, or meets other criteria.

These FAQs detail what the EITC is, how it has been extended for 2021, which taxpayers are eligible and how to claim it.

The 17 new FAQs are:

  1. What is the earned income tax credit?
  2. What is earned income?
  3. What are the earned income limits for eligible taxpayers without children?
  4. How old do I have to be to claim the income tax credit if I don’t have eligible children?
  5. Do I need to have a Social Security Number (SSN) to qualify for the Earned Income Tax Credit?
  6. Do my eligible children need to have SSNs for me to claim the earned income tax credit?
  7. What is the age requirement to claim the earned income tax credit if I have an eligible child?
  8. What are the earned income limits for people with an eligible child?
  9. Will any refunds I receive for claiming the Earned Income Tax Credit affect my government benefits?
  10. What is the maximum earned income tax credit amount for 2021 for eligible taxpayers with no eligible children?
  11. Is there a limit to the amount of investment income I can earn and still qualify for the earned income tax credit?
  12. If I do not file a joint declaration with my spouse, can I claim the earned income tax credit?
  13. Who is considered a qualifying homeless youth for earned income tax credit purposes?
  14. Who is considered a qualified ex-foster youth for earned income tax credit purposes?
  15. Can I choose to use my earned income in 2019 to calculate my earned income tax credit for 2021?
  16. Can a student claim the earned income tax credit for 2021?
  17. What is a specified student for earned income tax credit purposes?

File for free and use direct deposit

Taxpayers with income of $73,000 or less can file their federal tax returns electronically for free through the IRS Free file program. The fastest way to receive a tax refund is to file it electronically and deposit it directly into a financial account. Refunds can be directly deposited into bank accounts, prepaid debit cards or mobile apps as long as a routing and account number is provided.

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