Tax season brings out the usual grumbles about paperwork and waiting on refunds, but there's a bigger problem hiding in plain sight.
A benefit worth thousands of dollars is sitting unclaimed by the very people it was designed to help.
The earned income tax credit, or EITC, is one of the largest anti-poverty programs in the country, yet roughly one in five eligible workers never files for it.
The credit is aimed at working households with modest incomes, and it's refundable, meaning you can get money back even if you owe nothing.
For the 2024 tax year, the maximum credit tops out around $7,800 for families with three or more children.
Workers without kids can still qualify for a smaller amount, and that group is where the biggest gap shows up.
According to the IRS, people who don't normally file a return, including gig workers, part-timers, and folks in rural areas, are the most likely to skip it.
Some assume they make too little to bother.
Others worry that claiming it will trigger an audit.
Neither is true in the vast majority of cases.
The income limits move around each year, so it pays to check the current numbers rather than trust an old memory.
For the 2024 tax year, single filers with three kids can earn up to about $56,000 and still qualify.
Married couples filing jointly get a higher ceiling, closer to $62,000.
With one child, the cutoff drops into the $40,000s.
The tricky part is that this credit isn't automatic.
You have to claim it on your return, and the forms ask specific questions about income and dependents.
The IRS runs a Volunteer Income Tax Assistance program, and sites around the country will prepare your return at no cost if you earn under roughly $67,000.
AARP's Tax-Aide does something similar with no age requirement.
There's also a timing quirk worth knowing.
By law, the IRS can't issue refunds that include the EITC before mid-February, so early filers sometimes panic when their money doesn't show up right away.
A tool on the IRS website called Where's My Refund will tell you exactly where things stand.
If you already filed and think you missed the credit, it isn't necessarily gone.
You can amend a return going back up to three years.
That means the 2022 tax year may still be fair game depending on the calendar, so it's worth a conversation with a preparer before the window closes.
One more caution: the credit has become a favorite target for scammers.
If someone offers to get you a bigger refund for a cut of the money, or asks you to sign a blank return, walk away.
The IRS won't call demanding immediate payment, and it won't text you about a refund.
Free filing options exist, so there's no reason to pay a stranger a percentage of your own money.
Our take: this is one of the rare cases where the government is practically begging people to take its money, and the paperwork is the only real barrier.
If you worked at all last year and your income was modest, spend twenty minutes checking whether you qualify.
The worst outcome is finding out you don't.
Final Thoughts
The best outcome is a check for thousands of dollars you'd otherwise never see.