Up to $1,502 may be available to workers without children in 2022. According to The Republic Monitor, these results are due to changes made to the Earned Income Tax Credits. Tax credits of up to $6,000 are likely to be available to some low-income workers in 2022. Earned income tax credit eligibility is based on the number of children in a family, a federal benefit available to low-wage earners.
What Is the Earned Income Tax Credit?
This is the largest amount of the EITC, or Earned Income Tax Credit, that has ever been available to childless workers, even though it has existed since 1975. This year’s American Rescue Plan Act of 2021 temporarily increased the amount eligible individuals can receive.
For childless workers, the EITC payment is 1,502 dollars, which is significantly greater than the previous maximum of 543 dollars. The credit’s phase-in rate under this new system will increase from 7.65 percent to 15.3 percent by 2021, and the cutoff point will increase from $8,880 to $11,610.
Recipients who are Eligible
An earned income credit may be available to U.S. taxpayers who earn under $25,000 a year, according to Investopedia. Taking advantage of this credit will reduce their tax bill by the amount they earn, dollar-for-dollar. If taxpayers’ tax credit exceeds their taxable income, they may be eligible for a refund. A drop in income in 2020 resulting from the economic crisis and lockdown caused legislation to allow taxpayers to claim the EIC based either on their 2019 or 2020 earnings.
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Also, EITC is most beneficial to families with children, according to Fingerlakes. There is a 40 percent tax credit available to people who have two children. The maximum is $5,890 until an individual earns $42,000 or more. Those without children who qualify for the American Rescue Act can earn as low as $1,502 per month. If there is a balance on the credit, the taxpayer is then eligible for a refund.