Preparing Tax Return for family friend – Have prepared her return for years.
My question relates to Earned Income Credit (EIC)
In previous years she has not qualified for the EIC.
This year when I got to that step in TurboTax, the program informs me that she qualifies for the EIC credit, and that credit is $1,439.
My question revolves around this: Her income has not changed significantly over the years.
As Example –
Age: In her 80’s; Filing status: Single
2020 Return 2021 Return
Wages 10,050 10,585
Int/Div Income 227 203
Pensions/Annuities 1,249 1,249
Total Income 11,526 12,037
Standard Deduction 14,050 14,550
Taxable Income 0 0
Withholding 610 666
Earned Income Credit 0 1,439
An excerpt from IRS Pub. 596 for Tax Year 2020 states:
Rule 11—You must be at least Age 25 but Under Age 65 You must be at least age 25 but under age 65 at the end of 2020.
An excerpt from IRS Publication 596 for Tax Year 2021 on the Earned Income Credit states:
Rule 11—You Must Meet the Age Requirements
For 2021, you no longer need to be younger than age 65 to claim the EIC. The minimum age to claim the EIC is generally age 19 ….
That change is what I believe allows her to now qualify for the Earned Income Credit.
Is that a correct assumption on my part?
I do not want to file her taxes and then have the IRS deny the return if my assumption in reading the official IRS Publications is not correct.
Thanks for any advice you might be able to provide.
