The Earned Income Tax Credit pays low- and moderate-income workers, including those who owe no tax at all, but the IRS sends it only to people who file a return. If your income is too low to require one, file anyway. Check whether you qualify, then file for free.
About one in five people who qualify for the Earned Income Tax Credit (EITC) don’t claim it, by the IRS’s estimate. Many of them skip the return, because their pay was too low to require one and filing seemed pointless.
It isn’t. The EITC is refundable. Once it wipes out any tax you owe, the IRS pays you the rest as a refund, and if you owe nothing, you get all of it.
Take a single parent of two who earns $20,000 a year at a part-time job. At that pay, the EITC is worth several thousand dollars a year. By our math from the IRS’s credit tables, the credits from three skipped years add up to more than that parent earns in a year. Workers without children can qualify too, for a much smaller credit.
Check first with the IRS’s EITC Assistant. It asks about your income and family, then says whether you qualify and estimates your credit, without asking for your name or Social Security number. Gig pay counts as earned income, and if you netted $400 or more from gig work, you’re required to file regardless.
Then file without paying a preparer. IRS Free File offers guided tax software at no cost to filers under an income limit, and anyone who qualifies for the EITC falls under it. If you’d rather hand it off, Volunteer Income Tax Assistance (VITA) sites, which mainly serve workers in the EITC’s income range, have IRS-certified volunteers prepare returns for free. The VITA Locator on IRS.gov finds sites near you.
Go back for the years you skipped, too. You can claim the credit for a past year by filing that year’s return within three years of its original due date. After that, the money stays with the U.S. Treasury. If the old W-2s are gone, Get Transcript Online on IRS.gov shows the wages your employers reported.
A year of low pay is a year to file, not a year to skip.
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