earned income tax credit / refund

[terryhertz]

If one is 70 years old, on a small social security, ($10k yearly), and raising one young grandchild full time, and if, perhaps that person had some self employment for a portion of a year, (say, $5-7k), and had not reported or paid any self employment tax, when filing a 2019 tax return, would it 'normally' be of  significant enough IETC benefit to report that income, via an amended return, and pay the tax. I am assuming, based on the very low income (not even the threshold required to file...but was done only in order to receive the stimulus funds), that there would be a decent refund. IE: With whatever late penalties etc., would they still avail of enough EITC to make it worth while?

Is there a formula or chart for something like this?

[Carl]

Here's the bottom line. The EITC does not figure into this in any way, form or fashion. If a person has income that exceeds certain thresholds, they are required to file a tax return.

 - If one has more than $1,050 of unearned income (interest, devidends, etc.) they are required to file a return.

 - If one has more than $400 of self-employment income they are required to file a tax return.

 - If one has more than $12,300 of income from any and all sources combined, they are required to file a tax return.

In your case, there is more than $400 of self-employment income. THerefore, they are required to file a tax return to report that self-employment income on SCH C as a part of their personal 1040 tax return. While they will not pay "regular" income tax on any amount under $12,300, they will pay the self-employment tax on any amount of self-employment income that exceeds $400.

[xmasbaby0]

As Champ Carl pointed out, you are supposed to report self-employment income over $400 and pay self-employment tax on that income for Social Security and Medicare.  You can also put your business expenses on a Schedule C and the amount of SE tax you owe may be reduced.   You say you are raising your grandchild.  Although you are over 65 you may be able to get EIC with a dependent child.  Enter the self employment income and the information about your grandchild to see how it comes out.

  And there is another question--have you sought any added Social Security benefits based on having that dependent child?  If you have not done that, you should contact Social Security.  Your post does not mention why you have your grandchild.  If she is not receiving survivor benefits then you may be able to get an increased amount of SS while she is your dependent.  It is worth exploring with SS.

[xmasbaby0]

The IRS offers a tool to help you estimate your EIC:

https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/use-the-eitc-assistant

https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit

Edited a few minutes later....

Oh, and if you are able to report earned income and you have a dependent child under the age of 17 who has a SSN, you may also end up getting some child tax credit.  For the $7000 you mentioned, the refundable part of CTC would be $650-675ish