This article was written by Shailana Dunn-Wall, Tax Law Project Staff Attorney
January 27, 2023, is Earned Income Tax Credit (EITC, sometimes called EIC) Awareness day. It might seem odd to have a holiday celebrating part of the tax code, but given how significant this tax credit is for so many families, it’s definitely worth celebrating. In 2021, about 123,000 Nebraskans were able to claim the EITC on their tax returns, resulting in an average credit amount of $2,330. That’s a total of $286,000,000 of EITC in Nebraska. EITC is the largest tax credit many Nebraskans earn, yet only about 80% of eligible taxpayers claim the credit each year.
EITC is a credit designed to help low and middle-income working families. The amount of credit earned is based on the family size and the amount of “earned income,” (generally W-2 wages) that the taxpayer makes each year. The credit is generally larger for taxpayers with more qualifying dependent children, since they are supporting larger families. The credit is determined by multiplying the taxpayer’s earned income by a certain percentage (based on family size).
A taxpayer is eligible for EITC if they:
- Have worked and earned income;
- Do not have excessive investment or foreign-earned income;
- Have a valid social security number by the due date of their taxes (including extensions);
- Are a US citizen or resident of the US for at least 6 months of the year; and,
- At least 19 years old at the end of the previous year (18 if former foster youth).
If a taxpayer meets the requirements listed above, they may be eligible for EITC on their 2022 taxes (filed in spring 2023) if their income does not exceed the amounts in the table below:
|Number of qualifying children||Income Limit||Income Limit for Married Filing Jointly|
|3 or more||$53,057||$59,187|
There are special qualification rules for EITC that increase eligibility for members of the military, clergy and taxpayers with disabilities. If you or a member of your family falls into one or more of these categories, you can use the IRS’ EITC Assistant to help determine if you are eligible for EITC: https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/use-the-eitc-assistant.
How to claim the Earned Income Tax Credit for 2022
Prepare and file your federal income tax return (taxes are due April 18, 2023, and as long as taxes are filed within 3 years of the due date, qualifying taxpayers may be able to claim the credit). You must meet the income limit and other eligibility criteria (listed above). Like other tax credits, the EITC will first be applied to the amount of taxes owed by the taxpayer. If the amount of EITC is more than the taxes a person owes, the amount left over will be refunded to the taxpayer.
Need additional help? Resources to help file taxes
If you think you might qualify for EITC but need help filing your taxes, there are free resources that can help.
- The Volunteer Income Tax Assistance Program (VITA) assists many low-income, elderly, and disabled taxpayers each year. To find a VITA site near you and make an appointment visit the VITA locator tool or call 211.
- For the Omaha area, the Omaha EITC Coalition can assist with preparation, and appointments can be made here.
- If your tax refund is taken or garnished, or if the IRS says you owe money that you do not think you owe, please call Legal Aid of Nebraska at our Statewide Accessline at 1-877-250-2016 (hours: Monday/Wednesday 8:30 – 11:30 a.m. and Tuesday/Thursday 1 – 4 p.m.)
- If you have questions, please visit legalaidofnebraska.org
- Legal Aid of Nebraska and the Taxpayer Advocate Service host a Taxpayer Problem Solving day on the last Tuesday of each month from 2:30 – 4 p.m.