Lower net income this year, and Earned Income Tax Credit (EITC) question

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Hi,

I am a 37 year old, and earned a mere 4388USD in total net income for 2022, all as a 1099 Non-Employee independent contractor, and Single tax filer, without dependents. Last year I earned 17 200USD in gross, with a an adjusted gross of approximately 12 850USD.

Now, I realize that this year, my 4388USD total net is less than the minimum 12 950USD that is required to file, as a Single tax payer without dependents, and without being claimed as a dependent.

However, I am interested in finding the answer to two questions:

1) Do I receive any cash payment(check) if I file, and claim the 

13 850USD Standard deduction  for 2023? Or do I merely receive some money in the form of credit that goes to my Social Security in some form? If someone could please clarify.

2) Do my 4388USD count as earned toward my Social Security credits, on the path to reach the 40 credits required for social security? Even if I claim the 13 850USD Standard deduction  for 2023?

An answer to these two questions would be much appreciated.

Thank you.

[JohnB5677]

If you are self-employed (non-Employee independent contractor) you have to file an income tax return if your net earnings from self-employment were $400 or more. So, you are required to file a tax return.

Do I receive any cash payment(check) if I file, and claim the $13,850 USD Standard deduction for 2023? 

• You will only get a refund if you've had income taxes withheld, or if you qualify for the Earned Income Credit.
• The Earned Income Credit is calculated before you decrease your income by the standard deduction.

Or do I merely receive some money in the form of credit that goes to my Social Security in some form? If someone could please clarify.

• No, a refund or a tax credit is not tied to your Social Security.  If you qualify, it would be paid directly to you.
• The amount of profit you had in your business is subject to the self-employment tax.  That is the profit before you take the standard deduction.

Do my $4,388 USD count as earned toward my Social Security credits, on the path to reach the 40 credits required for social security? 

• Yes, however, if you have business expenses, the $4,388 will be reduced.
• You must earn at least 40 Social Security credits in your lifetime to qualify for Social Security benefits.
• In 2023, you earn 1 Social Security and Medicare credit for every $1,640 in covered earnings each year. You must earn $6,560 to get the maximum 4 credits for the year.

Even if I claim the 13 850 USD Standard deduction for 2023?

• You will be charged the self-employment tax, and have earned the credits prior to taking the standard deduction.