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Deductions & credits
The Earned Income Credit is a curve that bases it's calculation on your earned income. The curve starts at zero and goes up for income earned until a point where it "peaks". Eventually this peak starts to decrease until the curve ends back at zero. This happens when the income cap is reached.
Having said that, if your Earned Income Credit went down when you earned more, then you passed the peak and have moved down the slope. The following are the approximate amounts that your refund would have changed by:
- No children - $3,000 x 7.65% (phase out rate) = $229.50
- 1 child - $3,000 x 15.98% (phase out rate) = $479.40
- 2+ children - $3,000 x 21.06% (phase out rate) = $631.80
Please refer to the link below for more information.
http://www.cbpp.org/research/federal-tax/policy-basics-the-earned-income-tax-credit
May 31, 2019
8:14 PM