Earned Income Credit For 2022

[Christian]

For 2021 the credit was enlarged to include workers over 65 years of age who previously had been excluded. I've not seen anything to indicate this provision was extended for 2022 or later years. Have any of you ? I have one or two clients who greatly benefited from this provision for 2021.  

[mcb39]

I had several clients who benefited; especially self-employed.  I have a feeling that may be gone this year.

[Lee B]

Unfortunately our elected representatives put off dealing with extenders until very late in the year or even worse early next year.

[Lee B]

Earned income tax credit for 2021

Dependents   0   Maximum AGI (single or head of household)   $21,430   Maximum AGI (married filing jointly)   $27,380   Maximum EITC   $1,502

 

Big Reduction for filers with no dependents

Earned income tax credit for 2022 

Dependents   0   Maximum AGI   (single or head of household)   $16,480   Maximum AGI  (Married filing jointly)   $22,610   Maximum EITC   $560

[Lion EA]

Yep, a temporary boost.

Does the age limit return? I had a 78 year old with a part-time job who received a nice refund due to EIC for 2021.

[Lee B]

Copied from IRS Tax Topic 601:

 

 

"Have a qualifying child who meets the age, relationship, residency, and joint return tests, and isn't treated as the qualifying child of another person. Or, if you don't have a qualifying child, you must:

be age 25 but under 65 at the end of the year. However, for 2021, there is no maximum age limit for eligible workers. In addition, for 2021, the minimum age limit is 24 years of age for a full-time student, 18 years of age for a qualified former foster youth or a qualified homeless youth, or 19 years of age for all others; 

not qualify as a dependent of another person; and live in the United States for more than half of the year."

[mcb39]

This is going to really hurt because so many adults are working beyond age 65 at least at part-time jobs.  

So, now we just get to unlearn a whole new set of rules.

[Christian]

I suspected this was going to be a one trick pony. What about all that age discrimination you once heard about ? It seems to me patently unfair that a 25 year old qualifies but a 65 year old does not.

[Margaret CPA in OH]

I think this is especially unfair when one considers how many grandparents or foster parents are 65+, still working and having all the same responsibilities and more of many younger people.  It is income restricted so only low income people qualify anyway.  And people in increasing numbers, I believe, must continue to work instead of retiring.  If having worked in low wage jobs, often without retirement plans, they could use a little boost, in my opinion.

[kathyc2]

3 hours ago, Margaret CPA in OH said:

I think this is especially unfair when one considers how many grandparents or foster parents are 65+, still working and having all the same responsibilities and more of many younger people.  It is income restricted so only low income people qualify anyway.  And people in increasing numbers, I believe, must continue to work instead of retiring.  If having worked in low wage jobs, often without retirement plans, they could use a little boost, in my opinion.

The 65 restriction does NOT apply if there are qualifying children.

 

[mcb39]

 In any event, IMO, it is unfair and discriminatory.  So many adults are working into their 70's and even 80's and paying into the SS fund as well as taxes.  In most cases, the credit wasn't a lot, but they were thrilled to get it.  They, at least, were willing to WORK for very little while the huge amounts of EIC were doled out to young people with children; most of whom knew exactly how to play the checks and balances in order to receive the highest amount of EIC.  Yes, we had to do the due diligence, but so many of them had it all figured out before they ever came in.  The tax laws encourage them to stay unmarried and just live together  in order to get the tax refund large enough to pay off their credit cards for frivolous spending, while senior citizens are working part-time jobs just to pay their bills.  Strictly my opinion!  

[kathyc2]

40 minutes ago, mcb39 said:

it is unfair and discriminatory

I learned a long time ago that tax policy will never be fair, as "fair" is a subjective term.  

[mcb39]

1 hour ago, kathyc2 said:

I learned a long time ago that tax policy will never be fair, as "fair" is a subjective term.  

Of course, you are correct.  I was just angry and stating my opinion.  Thank you Kathy!

[Lee B]

On the other hand the Social Security Benefits paid to people at this level of AGI  wouldn't have been taxable.

[Medlin Software, Dennis]

The irony (or other suitable term) is, if taxation was simple and fair, we would not be having this discussion at all... as we would be in some other line of income generating activity.

It is something I actually discuss with those who ask me about what I do, or about any sort of job with bookkeeping, taxation, and the like.  One has to accept the unfairness or waste (to me) time thinking about the unfairness.  Why a waste of time?  IMO, few who have (now un)common sense are in a position to make changes, and those with (now un)common sense have enough of it to not get into positions to be able to make changes (smile).

Fair or not, my (our?) business is dealing with the field given, always looking to pay all we have to, but not one cent more.

[Jim Oh Bkkr]

18 hours ago, mcb39 said:

...young people with children; most of whom knew exactly how to play the checks and balances in order to receive the highest amount of EIC.  Yes, we had to do the due diligence, but so many of them had it all figured out before they ever came in. 

This!

(And it always gave me a little chuckle when they, almost 100% of the time, called it the "unearned" income credit.)

[Abby Normal]

On 11/7/2022 at 12:20 PM, kathyc2 said:

I learned a long time ago that tax policy will never be fair, as "fair" is a subjective term.  

No matter how you create a tax law, there will always be winners and losers, due to the complex makeup of the population.

[Lee B]

8 minutes ago, Abby Normal said:

No matter how you create a tax law, there will always be winners and losers, due to the complex makeup of the population.

Then there things in the tax code like "Carried Interest" taxed at 15 % protected by the large campaign contributions made by Wall Street.

Some members of our population are more equal than others.

 

[Christian]

I have looked to see if this provision is included in the recently passed bill but I do not see it. The increased Child Tax Credit failed to make it so this one may have fallen through the cracks as well.