The earned income tax credit is one of the most important tax credits you can receive each year, but it is often overlooked at tax time. The credit is intended for low- to middle-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 says one in five eligible taxpayers don’t claim the credit and miss out on the money they’re entitled to each year. The EITC is only available to those who file a tax return each year. However, the rules have changed this year and the EITC is worth up to $6,728 for a family with three or more children, or up to $1,502 for taxpayers who don’t have an eligible child, said the IRS. Your exact amount depends on whether or not you owe taxes. If the amount of EITC owed to you is more than your tax bill, you will receive the difference.
To be able to claim the EITC on a 2021 tax return, you must have worked and earned income below $51,464. If you are married, filing jointly that number increases to $57,414. Your investment must also have been less than $10,000 in 2021 and you have not filed a foreign earned tax return. 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 for all 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 don’t make enough money to file a tax return usually, but think you meet all the eligibility requirements, you still need to file for 2021 in order to receive your refund money.
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This article originally appeared on GOBankingRates.com: 2022 Tax Refund: You Could Miss $6,728 by Not Claiming the Earned Income Tax Credit