**You MUST use the IRS tables and worksheets to determine the EXACT amount of Earned Income Credit!

The Earned Income Credit CANNOT be claimed if certain investment income is GREATER than $10,000.

Temporary Changes Under the American Rescue Plan

For tax year 2021 only, age restrictions for claiming EIC have been modified.

The "maximum age of 65" has been eliminated. Therefore, those who are 65 or older may claim EIC if they otherwise qualify.

The "minimum age of 25" has been changed to "Applicable Minimum Age", which is now age 19. However, those who are age 19 through 23 as of December 31, 2021 do NOT qualify for EIC if they are a full-time student.

Qualified former foster youths and qualified homeless youths can claim EIC beginning at age 18 if they otherwise qualify.

Option to Use Either Year 2019 or Year 2021 Earned Income

To calculate your allowable EIC for 2021, you can use either your 2019 earned income or your 2021 earned income, whichever will give you a larger credit.

Permanent Changes Under the American Rescue Plan

Investment Income Increase

Beginning with tax year 2021, the amount of certain types of investment income you can have before being disqualified for EIC has increased from $3,650 to $10,000. For tax year 2022 and later, the $10,000 limit will be adjusted for inflation.

Married Filing Separately May Now Qualify for EIC

Previously, if your filing status was "Married Filing Separately" you were not eligible to claim the EIC. For tax years 2021 and beyond, the new tax law states that a married individual can claim the EIC on a Married Filing Separately tax return as long as a qualifying child lives with the individual for more than six months during the tax year AND the individual does not have the same principal place of abode as the spouse for the last six months of the year.