How to Claim Over $12,000 in Tax Credits: The Earned Income Tax Credit Explained

According to information recently released by the Internal Revenue Service (IRS), millions of Americans may be eligible for a tax credit of over $12,000. As a result, many Americans are looking for strategies to maximize their returns this tax season. The Earned Income Tax Credit (EITC) is an important opportunity that provides financial assistance, especially to working people with low or middle-class incomes. This credit can provide significant financial assistance depending on your family size and income.

Are you eligible for the EITC?

The EITC is a refundable tax credit intended to reduce the tax burden on eligible working people. If you qualify, you can use this credit to reduce your tax liability, which can increase your refund. The maximum credit amounts for the 2024 tax year are as follows:

• No qualifying children: Up to $632
• One qualifying child: Up to $4,213
• Two qualifying children: Up to $6,960
• Three or more qualifying children: Up to $7,830

Eligibility for the EITC

To be eligible for this credit, your adjusted gross income (AGI) and earned income must fall under certain criteria. For example, if you’re filing jointly, the AGI limit for you is $66,819, while for a single filer with three or more qualifying children, the limit must be $59,899 or less. Also, your investment income must not exceed $11,600.

Some regional governments, such as California, offer additional credits. In California:

• Individuals with income up to $31,950 are eligible for the CalEITC.
• Under the YCTC, eligible parents with children under six years of age can receive up to $1,154 in benefits.

In California, an eligible family can receive up to $12,628 in credits combined with the federal EITC. You must meet the following criteria:

• Income limits: Make sure your AGI and earned income are below set levels.
• Investment income: Your investment income should not exceed $11,600.
• Social Security number: If you, your spouse and any eligible children are filing jointly, you must have a valid Social Security number.
• Citizenship: You must be a U.S. citizen or resident alien for this tax year.
• Filing status: If you are married, you must file jointly.

There are also some special rules that apply to disability income, chaplains and members of the armed forces.

Can you get EITC benefits this year?

The EITC is especially helpful for people who have low incomes and are struggling to support their families. The EITC increases the tax refund for many Americans. For example, if a person has low income and one qualifying child, he or she can receive a benefit of up to $4,213. If a person is without children, he or she can receive a benefit of up to $632, provided his or her income is below the qualifying level.

Sometimes life circumstances change, and you may be eligible for the EITC for a year when you were not eligible before. According to the IRS, about one-third of Americans receive the EITC for the first time in their lives because their financial, marital, or family circumstances have changed.

How to Claim the EITC?

You can claim the EITC on your tax return, and if you are eligible, you can get the benefit. For this, you should use the IRS’s EITC helper tool, which helps determine your eligibility. Make sure you file your tax return electronically and, if possible, opt for direct deposit so your refund is processed faster.

Conclusion

The EITC is an important tax credit that can provide economic relief to millions of Americans. If your income qualifies and you have done your tax filing correctly, you too can take advantage of this credit. Check eligibility for this credit and leave no stone unturned in filing your tax return so you can enjoy benefits of up to $12,000.

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