Good News! Workers without children will now be eligible for up to $1,502 in government aid next year due to the American Rescue Plan. If you aren’t aware of the earned income tax credit (EITC) and the modifications introduced as part of the American Rescue Plan, this money may come as a pleasant surprise.
The maximum non-parental credit has increased from $543 to $1,502 for 2021 only. It is now accessible to younger people for the first time, and there is no age restriction.
Someone without qualifying children must be at least 25 years old but no more than 64 to be eligible for the credits under “standard” EITC rules. According to these regulations, someone with no qualifying children must be at least 25 years old but no more than 64 years old to qualify.
How Much You Could Earn from EITC
The earned income tax credit is available to low-income wage earners without dependent children and modest-income families. The credit is proportionate to a set income from the first dollar until the credit reaches its maximum limit.
The credit limit is reached when earnings reach a certain level, after which it decreases with each additional dollar until there is no credit left. If the EITC is more valuable than the amount you owe to the IRS, you should claim it. It will be utilized to eliminate any tax liabilities, or you will receive a refund of the EITC.
Read More: New $300 Stimulus Payment is Coming Your Way. Here How to Get it?
Employees Without Children
By 2021, the earnings thresholds for childless individuals will have been increased from $15,820 to $21,430, according to IRS projections. Individuals filing separately will now earn a maximum of $32,000 per year versus approximately $17,920 previously.
Workers who have no children can receive up to $1,502 in cash if they do not pay federal taxes.
Employees With Children
The EITC that parents with qualifying children receive is determined by the number of children they have. If a family with one child files as a single taxpayer, they can earn up to $3,618 per year and collect $42,158 in EITC.
The highest earnings for married couples with two children were $62,480 in 2013 and $67,339 in 2014. A single tax-paying citizen with three kids might make as much as $6,728 if they earn less than $51,464.