Earned Income Tax Credit Changes for the 2022 Filing Season

The Earned Income Tax Credit (EITC) is one of the federal government’s largest refundable tax credits for low-to-moderate-income families. The recent expansion of this credit means that more people may qualify to have some much-needed money put back in their pocket.

Expanded EITC for people who do not have qualifying children

The credit is available to workers without qualifying children who are at least 19 years old and have earned income below $21,282 for those filing single and $27,439 for spouses filing a joint return. The maximum credit for taxpayers with no qualifying children is $1,442.

Some taxpayers can use 2019 earned income to figure their EITC

There is a chance that your earned income credit will be larger if you elect to use your 2019 earned income to figure your 2021 earned income credit. This may help taxpayers get more of a refund. In order to figure out how much credit you would qualify for, it is a good idea to review Form 1040 line 27c in the instructions booklet. Keep in mind that this option can only be elected if your 2019 earned income exceeds your 2021 anticipated earnings from employment.

New law changes expand the EITC for 2021 and future years. These changes include:

• Starting in the tax year 2021, the amount of investment income they can receive and still be eligible for the EITC increases to $10,000. After 2021, the $10,000 limit is indexed for inflation.

• Married but separated spouses have the option of being considered unmarried for the purposes of collecting EITC. The spouse claiming the credit cannot file jointly with the other spouse in order to qualify. They must have a qualified child living with them for more than half the year and one of the following:

  • Do not share a primary residence with the other spouse for at least the last six months of the year.

  • If you are separated but don’t live with your spouse, you may still claim the Earned Income Tax Credit (EITC). Taxpayers must check the box twice on Page 1 of their Form 1040 indicating that they are married filing separately and have a qualifying child.

• Many taxpayers with children who do not have valid Social Security numbers (SSNs) may still be eligible to claim the Earned Income Tax Credit (EITC). You only need an SSN, according to the Internal Revenue Service, if you want to claim a refund.
  
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