(JustPatriots.com)- Congress originally authorized the Earned Income Tax Credit (EITC) in 1975, partly to reduce the burden of Social Security taxes and encourage work.
Acting IRS Commissioner Doug O’Donnell said on January 27, “this is an essential tax benefit that assists millions of hard-working Americans every year.”
O’Donnell said millions of Americans are entitled to a tax credit that last year averaged more than $2,000. He noted that many individuals who are qualified for the money don’t claim it. Each year, a large number of individuals lose out on credit because they are unaware of it or fail to recognize their eligibility.
According to IRS estimates, 20% or more eligible taxpayers fail to claim the EITC. People who live in non-traditional homes (such as grandparents raising grandchildren), those whose earnings declined or whose marital or parental status changed, those who reside in rural areas, veterans, the self-employed, and those whose incomes fall below the threshold for filing a tax return are particularly prone to overlooking the tax credit.
The IRS oversaw the tax credit and said that around 31 million Americans who qualified for it got payments totaling nearly $64 billion in 2022. The average tax credit per qualified individual was more than $2,000. They warn consumers against skipping out on this significant credit and encourage them to analyze it thoroughly.
According to O’Donnell, people who suffered a significant change in their work, marital status, the birth of a new kid, or other aspects of their lives during the previous year may qualify for the first time.
Although there are other differences in income, filing status, and the number of dependents that influence eligibility, the EITC is considered a tax credit for lower-income taxpayers.
If they fulfill the requirements, separated spouses who are married but do not file a joint tax return may also be eligible.
People who don’t make enough money to be required to submit a tax return must do so to be eligible for the credit.
The IRS has a program called the EITC Assistant that consumers may use to determine their EITC eligibility and how much they can anticipate receiving.