The amount you receive for the Earned Income Tax Credit (EITC) depends on whether you are married, how many qualifying children you have, and your exact amount of earned income. It varies from person to person and can change each year depending on changes in any of those factors.
The credit is a percentage of your earned income, so, the credit increases when your income increases (until you hit the cutoff amount).
Many taxpayers made less in 2021 than they did in 2019 because of COVID-19 and its impact on the economy. To make up for this, the IRS is temporarily allowing taxpayers to qualify for the EITC using whichever is higher, their 2019 or 2021 earned income.
Since the EITC depends on many factors, using your higher income may not always increase your credit, that’s why we’re helping you check to see which gives you a bigger benefit
IRS Publication 596 Earned Income Credit (EIC) 2021 - https://www.irs.gov/pub/irs-pdf/p596.pdf
Tax relief legislation.
Recent legislation provided certain tax-related benefits, including an election to use your 2019 earned income to figure your 2021 earned income credit.
