TSCPA News

IRS Issues New FAQs on 2021 Earned Income Tax Credit

March 2, 2022

The IRS recently issued frequently asked questions (FAQs) for the 2021 Earned Income Tax Credit (EITC) to educate eligible taxpayers on how to properly claim the credit when they prepare and file their 2021 tax return.

The FAQs detail what the EITC is, how it was expanded for 2021, which taxpayers are eligible and how to claim it. The 17 new FAQs are:

  • What is the Earned Income Tax Credit?
  • What is earned income?
  • What are the earned income limits for taxpayers without qualifying children?
  • How old must I be to claim the Earned Income Tax Credit if I do not have qualifying children?
  • Do I need to have a Social Security number (SSN) to be eligible to claim the Earned Income Tax Credit?
  • Do my qualifying children need to have SSNs in order for me to claim the Earned Income Tax Credit?
  • What are the age requirements for claiming the Earned Income Tax Credit if I have a qualifying child?
  • What are the earned income limits for individuals with a qualifying child?
  • Will any refund that I receive because I claimed the Earned Income Tax Credit affect my government benefits?
  • What is the maximum amount of the Earned Income Tax Credit for 2021 for eligible taxpayers without qualifying children?
  • Is there a limit on the amount of investment income I can earn and remain eligible for the Earned Income Tax Credit?
  • If I am not filing a joint return with my spouse, can I claim the Earned Income Tax Credit?
  • Who is considered a qualified homeless youth for purposes of the Earned Income Tax Credit?
  • Who is considered a qualified former foster youth for purposes of the Earned Income Tax Credit?
  • Can I elect to use my 2019 earned income to figure my Earned Income Tax Credit for 2021?
  • Can a student claim the Earned Income Tax Credit for 2021?
  • What is a specified student for purposes of the Earned Income Tax Credit?

The EITC helps low- to moderate-income workers and families in the form of a credit to either reduce the taxes owed or an added payment to increase a tax refund. The amount of the credit may change if the taxpayer has children or dependents, is disabled or meets other criteria.