The season we all like the least has arrived (and no, it’s not the one where you come back from vacation), it’s tax season!. But we have to know that during this tax season you can also receive financial help from the IRS. Yes, just like you read, it’s a good opportunity to get back some of what you have to pay.
However, there’s a detail that goes unnoticed by many taxpayers: according to the IRS itself, one out of every five taxpayers doesn’t claim a tax credit that could boost your wallet by up to $7,830!
We’re talking about the Earned Income Tax Credit (EITC), a benefit specifically designed for workers with low income. Even though the IRS has carried out information campaigns, thousands of people still don’t apply for it, either because they don’t know about it, are confused, or think they don’t qualify. So, we’re going to shed some light and explain everything you need to know about this credit so that, if you qualify, you don’t miss out on it!
What is the EITC and how does it work?
The Earned Income Tax Credit is a refundable credit, which means it not only reduces the amount of taxes you owe, but even if you owe nothing, you can receive the money as a direct refund from the IRS. It’s intended for those who have low or fairly moderate income.
Who can apply?
As we said, it’s mainly intended for single people or couples who work and have modest income, who have children (or not), and who meet the residency and legal status requirements (having been a citizen or resident during this last fiscal year and having a valid Social Security number). There are also other requirements:
- Earned income below the IRS limit
- Investment income below the IRS threshold
- You cannot file Form 2555 (Foreign Earned Income)
How much money can you receive?
The EITC depends on the taxpayer’s family and personal situation. The amounts last year (which will be more or less the same this year) were the following. The best part is that you can receive it even if you don’t owe taxes to the government:
- Up to $632 if you have no children
- Up to $4,213 with one child
- Up to $6,960 with two children
- Up to $7,830 if you have three or more children
Why don’t people claim it?
Mainly due to lack of information. The IRS estimates that 20% of taxpayers who qualify for this payment don’t request the benefit because they don’t know they’re eligible (maybe because they think they can’t apply if they don’t have children, but that’s not true). In other cases, people file their taxes on their own and, out of fear of making mistakes, prefer not to add credits they don’t fully understand. But the truth is that the IRS has created online tools that help you check whether you qualify, step by step, and they’re available in both English and Spanish.
Unclaimed money
Every year, the government allocates billions of dollars to this program, and a huge portion goes unclaimed. It’s money that could make a big difference for many families: paying off debts, covering rent, saving, or simply breathing a little easier. How could someone miss the chance to claim it?
When do you receive the money?
When you file electronically, the deposit can go directly into your bank account if you request it, usually after 21 days. But if you are claiming the EITC, you may have to wait a little longer.
For this year, 2025, EITC credit payments will begin arriving as of February 27, as long as everything is correct and you filed your return on time. But in general, the payment may take between six and twelve weeks.
This is one of the strongest credits the IRS offers, so do the math, check with the IRS to see if you qualify, and claim what’s yours, you just have to ask for it!
