Tax credits are an important way of providing financial relief to many families across the country. Tax credits refer to money a tax filer can deduct from the tax money which they owe the internal revenue service (IRS). In essence, it reduced the amount of income tax you owe the government. If you have not claimed already, you may qualify for the Earned Income Tx Credit, one of the lesser known tax credits which tax payers often overlook when filing their taxes.
One in five tax payers do not make use of this credit
Unlike other tax credits, the Earned Income Tax Credit is one which often gets overlooked. Tax credits like the Child Tax Credit are relatively well known, and are claimed regularly by qualifying tax payers each year. For the Child Tax Credit, Under Code Sec. 24, taxpayers within certain income brackets can claim a credit for their children Currently, the Child Tax Credit is set at $2,000 per qualifying child but will revert to $1,000 from next year.
The Earned Income Tax Credit is specifically targeted towards low-income working individuals or married couples. The tax break you receive from the Earned Income Tax Credit depends on a recipient’s income and number of children. If you qualify to receive the credit, you have three years to file and claim a refund from the due date of your tax return. According to the IRS, ff you were eligible, you can still claim the Earned Income Tax Credit for prior years.
How to qualify to receive the Earned Income Tax Credit
To qualify for the Earned Income Tax Credit, you must meet the following criteria:
- People with annual incomes below $25,511 a year without children or a maximum of $66,819 a year with three or more children.
- Be a U.S. citizen by birth or a resident for at least one year.
- Have a Social Security Number (SSN)
- File a tax return for the 2025 fiscal year
If you qualify for the Earned Income Tax Credit, you should also check to see if you also qualify for the Child tax credit and the credit for other dependents, Child and Dependent Care Credit, and Education Credits. These credits often have similar income qualifying criteria, so you are likely to be eligible to receive at least one of them.
To claim your Earned Income Tax Credit for the previous three years if you have not already, you have the following deadlines to bear in mind:
- For 2023 if you file your tax return by April 15, 2027
- For 2022 if you file your tax return by April 15, 2026
- For 2021 if you file your tax return by April 15, 2025
According to data from December 2024, approximately 23 million workers and families had received a total of approximately $64 billion from the Earned Income Tax Credit.
Expect your tax refunds soon
With tax season upon us, you can also start to soon expect your tax refunds. The deadline to file your taxes this year is April 15, the same deadline to file for your 2021 Earned Income Tax Credit. You can start to expect your tax returns for the 2024/2025 fiscal year within 10 days of filing your taxes. You can use the online “Where’s My Refund” tool provided by the IRS to check the status of your refund.
If you are ever unsure of how to file your taxes and claim your relevant tax credits, consult a financial advisor or utilize the online tool provided by the IRS. It can feel overwhelming when claiming for credits, especially if you are unsure of all the relevant qualifying criteria. A tax professional can streamline the process and ensure that you are abiding to all relevant tax laws.
