By Mark Castro, CPA
February 1, 2022
By law, any refunds on federal tax returns that claim EITC and/or the Additional Child Tax Credit will not be released until mid-February. These refunds will be released beginning on February 15, 2022 and should be in taxpayers’ accounts by the first week of March, provided there are no other issues with the return.
Information concerning projected deposit dates will not begin to appear on “Where’s My Refund?” until February 19, 2022.
Refunds will not be delayed if the return is claiming the new refundable child tax credit and is NOT claiming EITC.
For more details, see IRS News Release (IR-2022-20) of January 28, 2022 under the “Look for EITC Refunds by early March if no issues with tax return” section.
The American Rescue Plan Act included some permanent and temporary changes to how the earned income tax credit is calculated for 2021.
The following changes that apply to all eligible individuals have been made permanent:
For 2021, a taxpayer may elect to use their 2019 earned income if it is greater than their 2021 earned income when calculating the EITC on their 2021 federal tax return.
For 2021, the new legislation expands both the eligibility for and the amount of earned income tax credit for taxpayers without qualifying children by modifying the eligibility age and the credit formula. These changes are:
The earned income tax credit (EITC) is a tax credit for certain people who work and have earned income under $51,464 ($57,414 for Married filing jointly). This credit may give a qualifying taxpayer a refund even if they do not owe any tax or did not have any tax withheld from their wages.
Earned income includes all taxable income and wages that an individual receives from working for someone else, themselves, or from a business or farm they own.
EITC stands for Earned Income Tax Credit.
Eligibility for EITC is determined first for the taxpayer themselves and then on whether or not they have children. If they have children, then each child must meet the requirements to be a qualifying child for EITC purposes. If the taxpayer does not have any children, the taxpayer must meet all of the requirements to qualify for EITC for individuals with no qualifying children.
To claim the EITC, a taxpayer must meet the following requirements:
OR
For more details see the Who Qualifies for the Earned Income Tax Credit on the IRS website.
To qualify for EITC, a qualifying child must have a valid Social Security Number and not be claimed by more than one person as a qualifying child.
The child must also meet the following tests to be a qualifying child for EITC purposes:
For more details see the Qualifying Child Rules for EITC page on the IRS website.
A taxpayer is eligible to claim the EITC without a qualifying child if they met all of the following for 2021:
The income limits for the earned income tax credit for 2021 are as follows:
Qualifying Children Claimed |
Maximum AGI |
Maximum AGI |
Zero |
$21,430 |
$27,380 |
One |
$42,158 |
$48,108 |
Two |
$47,915 |
$53,865 |
Three or More |
$51,464 |
$57,414 |
The income ranges for the maximum earned income credit amount based on filing status for 2021 are as follows:
Single, MFS, Head of Household & Qualifying Widow(er) |
Earned Income Range to Receive Maximum Earned Income Credit |
Maximum Earned Income Credit Amount |
No Children |
$9,820 – $11,609 |
$1,502 |
One Child |
$10,640 - $19,519 |
$3,618 |
Two Children |
$14,950 - $19,519 |
$5,980 |
Three or More Children |
$14,950 - $19,519 |
$6,728 |
Married Filing Joint |
Earned Income Range to Receive Maximum Earned Income Credit |
Maximum Earned Income Credit Amount |
No Children |
$9,820 - $17,619 |
$1,502 |
One Child |
$10,620 - $25,469 |
$3,618 |
Two Children |
$14,950 - $25,469 |
$5,980 |
Three or More Children |
$14,950 - $25,469 |
$6,728 |
The earned income tax credit may not be received during the year as an advance of the credit claimed on their yearly federal income tax return.
In order to receive the earned income tax credit an eligible taxpayer must file a federal income tax return, meet all eligibility requirements and complete Schedule EIC if they have qualifying children.
To claim the EITC, an eligible taxpayer must complete and file a federal income tax return, meet all eligibility requirements and complete Schedule EIC if they have qualifying children.