Childless workers this year can claim an Earned Income Tax Credit worth up to $1,500 — triple the usual amount.
"The American Rescue Plan allows anyone 19 and older, who's not a full-time student [and] who has earnings, to claim the expanded EITC. It expanded both age and income eligibility and it made the credit larger," said Kris Cox, deputy director of federal tax policy at the Center on Budget and Policy Priorities, a left-leaning think tank. The American Rescue Plan expanded who can claim the EITC by raising income limits for childless workers.
The IRS has also scrapped prior years' age limits for the EITC. Previously, only workers ages 25 to 64 could claim it. This tax season, any worker 19 or older who meets the income guidelines can qualify for the credit, as well as 18-year-olds who are homeless or who have been in foster care.workers will benefit from the expanded credit, including older and younger workers who would normally get no credit, and those who will receive more money than usual.
Last year, a single worker had to earn $15,800 or less to qualify for the tax break, and the maximum credit for individuals amounted to only $540. By contrast, a single parent of two could have annual income of up to $47,000 and qualify for a $5,800 credit. "What this meant was people who worked for very low pay who were getting such a meager EITC, and also young working adults and older working adults, were completely excluded" from the EITC's benefits, said Cox.
The lower value of the EITC for childless workers means those people are less likely to claim the credit despite being entitled to it. About two-thirds of eligible childless taxpayers claim the EITC every year, compared with more than 80% of taxpayers with children, according to Cox.