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What Is the EITC?

The Earned Income Tax Credit or EITC is a tax credit for working families to help refund the some of the taxes (like FICA) that are taken off your paycheck. To qualify, you must have earned income from a job and meet certain income requirements. Because not everyone worker knows about the EITC, thousands of eligible families do not claim the EITC every year an lose out on money that could help pay for food and clothes and other bills or be saved for an emergency or a rainy day.

In response to the COVID-19 Pandemic, for 2021 filing season, taxpayers can use either their 2019 or 2020 income to determine which is most beneficial for them to receive a larger EITC.

EITC (and additional Child Tax Credit) returns will not be issued by the IRS until February 15th. This means if you file early, you should not expect to receive the refund in your bank account (or a check in the mail) until the end of the month.

There is both a federal EITC and a state EITC, so be sure to claim both! The Michigan EITC credit is equal to 6 percent of your federal credit. To better understand how the EITC impacts Michigan communities, click here.

EITC Eligibility Information for Tax Year 2020

Income Requirement for the EITC:*

$50,594 ($56,844 married filing jointly) with three or more qualifying children

$47,440 ($53,330 married filing jointly) with two qualifying children

$41,756 ($47,646 married filing jointly) with one qualifying child

$15,820 ($21,710 married filing jointly) with no qualifying children

Tax Year 2020 maximum credit:

$6,660 with three or more qualifying children ($399 Michigan’s EITC)

$5,920 with two qualifying children ($355 for Michigan’s EITC)

$3,584 with one qualifying child ($215 for Michigan’s EITC)

$538 with no qualifying children ($32 for Michigan’s EITC)

*Investment income must be $3,650 or less for the year. (Source: IRS website)

Don’t pay to get your taxes done–file for free!

Even if you may not qualify for the EITC, you can still get your taxes prepared at a VITA or TCE site by an IRS trained preparer if your income is $57,000 or less. There are probably a free tax sites in your community. Check back in January for a link to locate a free tax preparation site near you and, because this list is updated as information becomes available, check back often. You can also call 2-1-1 for help locating the VITA/TCE site nearest you.