Close search field

Changes To the Earned Income Tax Credit in 2022

6 minute read

Since most people already filed their tax return for 2021, everyone should begin planning for their 2022 tax returns. One of the major changes that taxpayers will need to plan for are the new changes to the Earned Income Tax Credit (EITC), effective for tax year 2022.

What is the EITC?

The EITC is one of the largest refundable tax credits available on a federal tax return. The EITC gives low- to moderate-income workers and families a tax break and a potential refund if the taxpayer does not owe tax. The amount of credit received is determined by the taxpayer’s income and number of children. In effect, the EITC acts as a wage subsidy to the lowest-paid workers.

The EITC was temporarily, substantially expanded for the 2021 tax year by the American Rescue Plan Act to expand the number of people who had access to the credit. Notably, some of the new changes are set to expire after 2021, while other changes will continue beyond 2021. Taxpayers will want to review these changes and ensure they are planning ahead for the changes occurring during tax year 2022.

How Will the EITC Change for 2022?

What 2021 Changes Expire for Tax Year 2022?

  • The minimum age limit for childless taxpayers is reverting back to 25 years old, compared to the 2021 minimum age limit of 19 years old;
  • The maximum age limit, which was completely removed for tax year 2021, is reverting back to 64 years old;
  • The maximum EITC amount available to childless taxpayers is reverting from $1,502 to $560;
  • The special exception allowing 18-year-old taxpayers who were either homeless in 2021 or formerly in foster care to qualify for the EITC is expiring;
  • The option to use the taxpayer’s 2019 earned income to calculate the 2021 EITC, rather than using the taxpayer’s 2021 income, expires after tax year 2021. 

What 2021 Changes Continue into Tax Year 2022 and beyond?

In 2021 and beyond the amount of investment income that a taxpayer can receive and still be eligible for the EITC is less than $10,000, adjusted each year for inflation. This limit is a significant increase, up from $3,650 in 2020.

Married but separated spouses can elect not to be treated as married on their tax return when determining the EITC. To qualify for this election, the spouses cannot file jointly, must have a qualifying child living with them for more than half the year, and either: (1) “Do not have the same principal residence as the other spouse for at least the last six months out of the year,” or (2) “Are legally separated according to their state law under a written separation agreement or a decree of separate maintenance and not live in the same household as their spouse at the end of the tax year for which the EITC is being claimed.

Single taxpayers and couples with children who have Social Security numbers (SSNs) can claim the EITC, even if their children do not have SSNs.

Easily Save Clients Thousands in Taxes

Scan client returns. Uncover savings. Export a professional tax plan. All in minutes.

Who Qualifies for the EITC in 2022?

Like prior years, the EITC allows for single individuals and married couples—both with or without children—to qualify for the credit. To qualify, the taxpayer(s) must not surpass an income threshold, which is determined by the number of dependents and the filing status of the taxpayer(s).

Other taxpayers who may qualify for the EITC include (1) taxpayers who live in a non-traditional family setting, such as a grandparent raising a grandchild; (2) members of the armed forces, subject to special qualifying rules; (3) clergy members or ministers, subject to special qualifying rules; and (4) taxpayers with disabilities or a taxpayer who cares for a disabled dependent.

How Much is the EITC?

Number of DependentsMaximum Adjusted Gross Income (single or head of household)Maximum Adjusted Gross Income (married filing jointly)Maximum EITC
0$21,430$27,380$1,502
1$42,158$48,108$3,618
2$47,915$53,865$5,980
3+$51,464$47,414$6,728
EITC Rates in 2021

These amounts are changing in 2022 to:

Number of DependentsMaximum Adjusted Gross Income (single or head of household)Maximum Adjusted Gross Income (married filing jointly)Maximum EITC
0$16,480$22,610$560
1$43,492$49,622$3,733
2$49,399$55,529$6,164
3+$53,057$59,187$6,935
EITC Rates in 2022

EITCs received are for childless taxpayers. Childless taxpayers 2022 and beyond will receive a much lower EITC amount and will have stricter income thresholds to qualify.

What About You?

The EITC can provide significant benefits to low- to moderate-income individuals, especially since qualifying for the credit is not solely dependent on whether the taxpayer has children. With credits all the way up to over $6,700, the EITC can offer large tax savings to taxpayers. Ensure you are up-to-date on all the most important tax changes.

See how Corvee can help!

Take The Next Step

See how Corvee allows your firm to break free of the tax prep cycle and begin making the profits you deserve.

Want to Learn More?

Please fill out the form below.

  • This field is for validation purposes and should be left unchanged.

Interested in Partnering?

Fill out the form below, and we'll be in touch.

Want to Learn More?

Please fill out the form below.

  • This field is for validation purposes and should be left unchanged.

Want to Learn More?

Please fill out the form below.

  • This field is for validation purposes and should be left unchanged.

Want to Learn More?

Please fill out the form below.

  • This field is for validation purposes and should be left unchanged.

Schedule Your Free Demo

  • Hidden
  • Hidden
  • Hidden
  • This field is for validation purposes and should be left unchanged.

Schedule a Free Test Drive with Q&A

Schedule a Free
Test Drive with Q&A

Let us show you how you could save your clients thousands of dollars and make tax planning easier than ever with Corvee.

Request a Demo 2.0 (Tax advisor or accountant)

"*" indicates required fields

This field is for validation purposes and should be left unchanged.

By clicking the button above I confirm that I have read and agree to the Terms & Conditions and Privacy Policy and agree to receive emails and texts about promotions at the phone number and email provided, and understand this consent is not required to purchase.