The United States Internal Revenue Service (IRS) has announced a measure that will help a large number of taxpayers with their taxes. Let us remember that this agency is in charge of ensuring compliance with tax obligations and of carrying out tax collection. Among its actions, it also offers various benefits, mostly known as “credits”, aimed at reducing the tax burden of citizens.
Within the framework of these IRS initiatives, there is one in particular that allows deducting up to $8,040 from the total amount to be paid in taxes. This is a benefit that represents a great tax relief for taxpayers. However, in order to receive it, they must comply with some requirements.
What are the requirements to receive this benefit?
The Earned Income Tax Credit (EITC) is a great tax benefit from the IRS. It is intended to provide support to low- and moderate-income individuals and families who must file taxes. In order to apply, it is necessary to meet the adjusted gross income (AGI) limits.
According to the official information released by the state agency, it should be considered that earned income is the concept that encompasses all taxable income and wages that a person receives for his or her work activities. This includes the amounts that he/she receives for another person, on his/her own account or for a business or farm that belongs to him/her.
These are the beneficiaries who will be able to deduct more than $8,000 in taxes from the IRS
The maximum AGI a person can get depends on their marital status and the number of children or relatives they claim when filing their taxes. The new amounts set for the 2025 tax year change when filing alone, as head of household, widowed, or in married status.
Also, the maximum AGI allowed is $61,555 if you have three children or claimed relatives. All those who do not have any, will have an adjusted gross income limit of $19,104 to access this credit from the U.S. Internal Revenue Service.
On the other hand, those who are married and file a joint return will have a limit of USD 68,675 if they declare three children or relatives in their filing. Thus, in case of having 3 or more qualifying children, they can access the credit of USD 8,046 in tax relief.
The IRS offers on its official website a special section where you can consult the table of earned income and the earned income tax credit. Through it, you will be able to consult the variable credit amounts depending on the number of children or relatives claimed.
I meet the requirements, how do I apply for the credit?
To claim the credit, beneficiaries must submit a number of documents that the IRS requests for the tax return. These include:
- Form 1040 (SP).
- U.S. Personal Income Tax Return or Form 1040-SR (SP).
- U.S. Tax Return for individuals age 65 or older.
- If you have a qualifying child, you must also file Schedule EIC (Form 1040 (SP) and Earned Income Credit, to provide information about them.
It should be noted that if you claim the EITC, your refund may be delayed. By law, the IRS cannot issue EITC refunds before mid-February. All refunds are expected to be available in bank accounts or on debit cards by March 1.
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