Today, Optima Tax Relief’s Chief Tax Officer and Lead Tax Attorney, Phil, explains one of the most valuable tax breaks for low- to moderate-income earners: the EITC.
What Is the EITC?
EITC stands for the Earned Income Tax Credit. It’s a refundable tax credit designed to help working individuals and families with low to moderate income. The credit has been around since President Gerald Ford’s administration and continues to be one of the most impactful tools for reducing tax burdens, and in some cases, boosting refunds.
Who Qualifies for the EITC?
Eligibility depends on a few factors: your income, your filing status, and the number of qualifying children you have. The credit is available to both individuals and families, and even those without children may qualify. The IRS updates income thresholds each year, so the best way to find out if you’re eligible is to check the IRS website or use their EITC Assistant tool.
Don’t Miss Out on the EITC
Each year, nearly 20% of taxpayers who qualify for the EITC don’t claim it, often because they don’t know it exists or assume they aren’t eligible. That’s a missed opportunity, especially considering the credit can be worth up to $7,830 for the 2024 tax year and $8,046 in 2025.
If you’re unsure whether you qualify or how to claim the credit, working with a tax professional can help you avoid leaving money on the table.
If you need tax help, contact us today for a Free Consultation