Earned Income Credit for Seniors (65 and older) without children/dependents

[taharadc]

I own a cleaning business with gross income about $12000 in 2023, and I turned 65 in 2023. I just did my 2023 income tax using Turbotax Home and Business (I use this every year), and it generated a form 1040-SR (for seniors). I have always qualified for Earned Income Credit based on my low income but this time for 2023 return I did not qualify. However, I searched online and found that as of Jan 2022 the rules changed so that low-income seniors without dependents may now qualify for EIC, but I have not been able to find details on how to claim that - since Turbotax did not automatically search for that condition and apply to me. 

Instead of calling IRS to find out, which I know could be a long hold time on the phone, I decided to ask this community forum if anyone knows if this rule change is true, and if it is, how can I apply for it.

Thank you!!!

[xmasbaby0 · Accepted solution]

The rules for EIC were different for tax year 2021  which you filed in 2022.   The "old" rules are back now.

 Earned Income Credit—-the rules are back to the “old” rules—

Those under 25 and over 65 without children are not eligible as they were uniquely in 2021.   And you cannot use your income from any earlier tax year to get the EIC for a 2022 return.  There is no “lookback” for 2023.  EIC for 2023 will be based on the income you earned by working in 2023.

https://ttlc.intuit.com/questions/1899157-what-are-the-qualifications-for-the-earned-income-credit-e...

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

[DoninGA]

If you are age 65 or older without a qualifying child you are no longer eligible for the Earned Income Tax Credit.

Go to this IRS website for information - https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/who-qualifies-for-the-ea...

[taharadc]

Thank you for your answer and info. I guess it is what it is. But it is extremely disappointing to me, to say the least, that the government doesn't give a tax break to a low income senior. Understanding the country is in deep debt, and I'm not saying every senior should be given a tax break, but just low income seniors like myself, with diabetes and other chronic health issues, but still doing my best to eke out a living.

Are you aware of any other tax breaks for low income seniors?
Thank you.

[Vanessa A · Accepted solution]

One tax break seniors specifically get is a higher standard deduction.  So, if you are single your standard deduction is $15,350 instead of $13,850.  

Also, if you are collecting social security, your benefits are not fully taxable.  

If you fall into the following, 85% of your social security is taxable income

• Single with income above $34,000
• Married Filing Jointly with income above $44,000
• Married Filing Separate regardless of income

If you fall into the following, 50% of your social security is taxable income

• Single with combined income between $25,000-$34,000
• Married Filing Jointly with combined income between $32,000 and $44,000

Your combined income is calculated by adding your

• AGI plus
• Nontaxable Interest plus
• 1/2 of your social security Benefits

Social Security Benefits Taxes

Since your cleaning business income was only $12,000, depending on how much you received in Social Security Benefits, you may not be paying any federal income tax.  It may be Self-Employment taxes you are seeing which is 15.3% of your business income.  There is no break for SE taxes. 

Also, depending on if you have any taxable income and how high your medical expenses are, itemizing your return may result in a better tax situation for you.  Medical expenses are only deductible for the amount in excess of 7.5% of your AGI.  So, if your AGI is $100,000, only your medical expenses over $7,500 will count towards your Itemized Deductions.  But, Itemized deductions include mortgage interest, State and Local taxes and charitable donations. 

[taharadc]

Thank you @Vanessa A . Very helpful and now I understand. Correct. The tax I owe is all SE.