IRS releases new guidance on Earned Income Tax Credit


The Internal Revenue Service posted a set of answers Wednesday to frequently asked questions on the Earned Income Tax Credit.


The new EITC FAQ page aims to provide information to eligible taxpayers on how to properly claim the credit when they prepare and file their 2021 tax return.


The EITC helps low- to moderate-income workers and families by giving them tax credits to either decrease the amount of taxes they owe or offering an added payment to increase a tax refund. The amount of the credit can change depending on whether the taxpayer has children, dependents, is disabled, or meets other criteria.


The new FAQs spell out what the EITC is, how it was expanded for 2021, which taxpayers are eligible, and how to claim it. For 2021, more workers without qualifying children can qualify for the EITC because the maximum credit has nearly tripled for eligible taxpayers and, for the first time, it’s available to younger workers and now has no age limit cap. For 2021, the EITC is generally available to filers without qualifying children who are at least 19 years old with earned income below $21,430, or $27,380 for spouses filing a joint return. The maximum EITC for filers with no qualifying children is $1,502. Another change for 2021 allows individuals to calculate the EITC using their 2019 earned income if it was higher than their 2021 earned income. In some cases, this option will give them a larger credit.


The 17 new FAQs include:

  • What Is the Earned Income Tax Credit?

  • What is earned income?

  • What are the earned income limits for taxpayers without qualifying children?

  • How old must I be to claim the Earned Income Tax Credit if I do not have qualifying children?

  • Do I need to have a Social Security number (SSN) to be eligible to claim the Earned Income Tax Credit?

  • Do my qualifying children need to have SSNs in order for me to claim the Earned Income Tax Credit?

  • What are the age requirements for claiming the Earned Income Tax Credit if I have a qualifying child?

  • What are the earned income limits for individuals with a qualifying child?

  • Will any refund that I receive because I claimed the Earned Income Tax Credit affect my government benefits?

  • What is the maximum amount of the Earned Income Tax Credit for 2021 for eligible taxpayers without qualifying children?

  • Is there a limit on the amount of investment income I can earn and remain eligible for the Earned Income Tax Credit?

  • If I am not filing a joint return with my spouse, can I claim the Earned Income Tax Credit?

  • Who is considered a qualified homeless youth for purposes of the Earned Income Tax Credit?

  • Who is considered a qualified former foster youth for purposes of the Earned Income Tax Credit?

  • Can I elect to use my 2019 earned income to figure my Earned Income Tax Credit for 2021?

  • Can a student claim the Earned Income Tax Credit for 2021?

  • What is a specified student for purposes of the Earned Income Tax Credit?


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