EARNED INCOME TAX CREDIT (EITC) – FREE MONEY FROM THE GOVERNMENT!!

Yes, that’s right! I consider the Earned Income Tax Credit (EITC) as free money from the government. How do you get it? You must qualify for it. Not every taxpayer get it.

The earned income tax credit is a refundable tax credit for low- to middle-income workers. For 2023 (tax returns filed in 2024), the tax credit ranges from $600 to $7,430, depending on tax-filing status, income and number of children. Taxpayers without children can qualify for a lower credit amount.

As the name implies, it is only given to those who have earned income, examples of which are wages from a job, gigs, self-employment, ownership of a business, etc.. Basically, income derived from working. It does not include interest and dividends, pensions and annuities, social security, unemployment benefits, alimony, child support, etc.. Basically, income you will receive even without working.

It is refundable. This means that you will get the Earned Income Tax Credit as a refund even if you do not have to pay taxes. If you do have to pay taxes, if will reduce the amount of taxes you have to pay. If your allowable credit is higher than the amount of taxes you have to pay, you still get the difference as a refund.

Please note that while there’s no set minimum income to qualify for the EITC, your Adjusted Gross Income (AGI) must be below certain thresholds which vary based on your filing status and the number of qualifying children. Below, find the maximum Adjusted Gross Income (AGI), investment income and credit for tax year 2023:

Maximum Credit Amounts 
The maximum amount of credit: 

• No qualifying children: $600 
• 1 qualifying child: $3,995 
• 2 qualifying children: $6,604 
• 3 or more qualifying children: $7,430

Investment income limit: $11,000 or less 

Investment income is money received in interest payments, dividends, capital gains realized with the sale of stock or other assets, and any profit made through another investment type. Additionally, interest earned on bank accounts, dividends received from stock owned by mutual fund holdings, and the profits on the sale of gold coins are all considered investment income.

So, when you’re having your income taxes prepared for year 2024, revisit this blog out and check if you qualify for Earned Income Tax Credit (EITC) and get your free money!!!