If you have a job and don’t know about the IRS’ Earned Income Tax Credit, then you are losing a significant amount of money. If you worked and earned less than $50K a year, the government may owe you money. At least 10 million people miss out on this free money each year. The Earned Income Tax Credit may even apply to you if you don’t have children.
Take a look at your W-2 for tax year 2016 and look at the table below:
2016 EITC Income Limits, Maximum Credit Amounts and Tax Law Updates
|If filing…||Qualifying Children Claimed|
|Zero||One||Two||Three or more|
|Single, Head of Household or Widowed||$14,880||$39,296||$44,648||$47,955|
|Married Filing Jointly||$20,430||$44,846||$50,198||$53,50|
The maximum amount of credit for Tax Year 2016 is:
- $6,269 with three or more qualifying children
- $5,572 with two qualifying children
- $3,373 with one qualifying child
- $506 with no qualifying children
Don’t be intimidated, thinking you have to fill out long forms or pay $300 for tax preparation. You can actually file your taxes online through an IRS-approved program known as Free File Alliance. This program is a nonprofit partnership with the IRS to assist millions to prepare and e-file their federal tax returns. With the Free File Alliance, if you make $62K or less, you can e-file your taxes for free with more than a dozen brand-name tax software programs available at no cost. One of the most popular programs is TurboTax, which has the Benefit Assist feature. This feature maximizes deductions and will even look at other programs that a person might be eligible for based on income. According to Inuit (the makers of TurboTax) CEO Brad Smith, “For 70 percent of Americans, their tax return check is the biggest check they will receive all year and they depend on this money.”
If you missed out on the EITC, you can amend your tax returns for 2013, 2014 and 2015 and get that cash back.