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jaydawn5
New Member

My earned income credit was higher last year and I made less money.

 
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2 Replies

My earned income credit was higher last year and I made less money.

Yes---it works that way sometimes because the EIC is calculated on a bell curve.   You can look at the EIC chart that starts on pace 33 of this IRS publication.

 

https://www.irs.gov/pub/irs-pdf/p596.pdf

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
Cynthiad66
Expert Alumni

My earned income credit was higher last year and I made less money.

@jaydawn5 - Basically, your credit depends on your income. At some point the lower the income the more the credit.  When your income reaches a certain point the credit starts to decrease.  Makes sense right?  More income means less assistance needed.  See Additional information below and use this link:  Earned Income CreditEarned Income Credit

 

This credit is targeted at households with modest incomes, so if you earn "too much" you may not qualify. Just how much can you earn and still qualify? It depends on how many qualifying children you have (we'll define this in a moment). Those with the lowest income qualify for the biggest credits. Those with incomes above the phase-out threshold qualify for lower credits until they reach the point where the credit is eliminated completely. The rules have been liberalized to result in higher credits for many households, especially those with three or more qualifying children. The following table shows the 2021 income limits for receiving credits and the maximum 2021 credit amounts.

 

If you have:                            Your earned income (and adjusted gross income)     Your maximum credit will be:

                                                                          must be less than:

No qualifying children             $21,430 ($27,380 if married and filing a joint return   )$1,502

1 qualifying child                     $42,158 ($48,108 if married and filing a joint return)   $3,618

2 or more qualifying children   $47,915 ($53,865 if married and filing a joint return)   $5,980

3 or more qualifying children   $51,464 ($57,414 if married and filing a joint return)   $6,728  

 

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