Jackson Hewitt® warns taxpayers that unemployment may have an effect on their eligibility for earned income tax credit

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(PRNewsfoto/Jackson Hewitt Tax Service Inc.)

JERSEY CITY, NJ, January 21, 2021 / PRNewswire / – To raise awareness of the eligibility of one of the most overlooked tax credits, the Earned Income Tax Credit (EITC), Jackson Hewitt Tax Service® is participating in this year’s EITC Awareness Day January 29, 2021.

The EITC is one of the largest tax credits valued up to $ 6,660 for qualified taxpayers with three or more children. Jackson Hewitt wants taxpayers to know that if they were unemployed or had significant job changes in 2020, their EITC eligibility could be compromised.

Credit is based on earned income and unemployment benefits are not considered to be earned income. Therefore, taxpayers who received unemployment benefits in 2020 could affect their eligibility for the EITC. Some taxpayers may not have earned enough income to qualify for lots of credit, while others may have had a drop in earned income that allows them to qualify now.

“According to a recent Jackson Hewitt survey, 36 percent of taxpayers said they had less income in 2020, which could affect their eligibility for earned income tax credits,” he said Mark Steber, Chief Tax Information Officer at Jackson Hewitt. “Due to the high unemployment rate in 2020, we expect a shift in those who qualify for the loan and want to make sure that people on EITC Awareness Day are aware of their potential eligibility.”

According to the IRS, about 20 percent of taxpayers eligible for the EITC do not claim it every year. This year, a new group of Eligible Recipients may not be aware that they are eligible for credit if they earned less than the Maximum Requirement in 2020. On the other hand, there may be a group of previous beneficiaries who may no longer qualify because they earned more than the required amounts.

2020 tax year EITC income amounts

Children or relatives claimed

Maximum AGI

(Filing as single, head of household, or widowed

Maximum AGI

(Filing as married joint filing)

zero

$ 15,820

$ 21,710

One

$ 41,756

$ 47,646

Two

$ 47,440

$ 53,330

Three

$ 50,594

$ 56,844

Capital yield limit: $ 3,650 Or less

Maximum loan amounts
The maximum credit taxpayers can claim:

– No qualified children: $ 538
– A qualified child: $ 3,584
– Two qualified children: $ 5,920
– Three or more qualified children: $ 6,660

Jackson Hewitt encourages taxpayers to continuously look at changes and benefits in tax law. For example, the latest tax legislation was passed in late December that included stimulus payments for select taxpayers and some safe harbor provisions for EITC taxpayers that offer both options and assistance. The special “lookback” for the EITC and Child Tax Credit (CTC) enables taxpayers to determine eligibility for the EITC and CTC for 2020 based on their 2019 income. Taxpayers can choose the lower taxable income year and use that to calculate their 2020 EITC and CTC.

Taxpayers wishing to apply for the EITC should file early to confirm whether they are eligible for the tax credit. This year because the IRS is only accepting and processing tax returns for 2020 February 12thFor many EITC taxpayers, the agency expects a refund in the first week of March.

During the 2020-2021 tax season, Jackson Hewitt offices are committed to protecting their customers, employees, and communities with security protocols that comply with local, state, and federal guidelines. Jackson Hewitt offers many filing options. Make an appointment at your nearest location to submit it to an office, hand in your documents or archive them from the comfort of your home Jackson Hewitt Online or Tax Pro from home. Visit jacksonhewitt.com to learn more about how to submit to Jackson Hewitt.

About Jackson Hewitt Tax Service Inc.
Jackson Hewitt Tax Service Inc. is an innovator in the tax industry committed to providing its hard-working clients with access to simple, affordable solutions for managing their taxes and tax refunds. Jackson Hewitt is dedicated to helping customers and stands behind his work with our Guarantee of Maximum Refunds and Lifetime Accuracy® (restrictions apply, see Jackson Hewitt’s website for more details). Customers can choose to submit at any of Jackson Hewitt’s nearly 6,000 franchise and proprietary locations, including 3,000 in Walmart stores and online. This allows customers to file their taxes easily and conveniently. For more information about products, services, and offerings, and to locate a Jackson Hewitt office, visit www.jacksonhewitt.com or call 1 (800) 234-1040.

methodology
The Jackson Hewitt survey was conducted online by Dynata on November 30, 2020under 1,000 American adults aged 18 and over. The respondents were selected from among those who volunteered to take part in online surveys. One thousand complete surveys were collected using the sampling frame based on US census data for age, race, gender, region, and income.

SOURCE Jackson Hewitt Tax Service Inc.

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