Blog – Larson Accounting Group

9 de May de 2025

The Internal Revenue Service joins in celebrating National Small Business Week by reminding taxpayers and small businesses that, even though the April 15, 2025, tax filing deadline has passed, it is important to stay vigilant against scams and fraud year-round.

Earlier this year, the IRS issued its annual Dirty Dozen list that highlights some persuasive schemes impacting businesses, including new client scams, spear phishing, fake charities, bad social media advice and false credit claims.

There are several protective measures taxpayers and businesses can take, such as watching out for fake requests for W-2s especially with the tax filing deadline already passed. Businesses are encouraged to take proactive steps today to safeguard their business and employees by implementing robust security measures. Some examples are using anti-malware/anti-virus software with automatic updates and enforcing strong passwords with multi-factor authentication. Ensure that you only enter personal data on secure websites (https) to prevent unauthorized access. See Publication 5961, Protect your business from tax scams PDF, for more information.

Business owners should prioritize the protection of their Employer Identification Number (EIN). Keep it secure and up to date with accurate information. Any necessary updates to an EIN should be made promptly by using Form 8822-B. This will ensure its integrity and minimize the risk of identity theft or fraudulent activity.

Disaster season is also upon us, which opens the door for additional fraud and scams to take place after a disaster occurs. Scammers may impersonate IRS workers, claiming they can offer “help” when filing casualty loss claims. Disaster survivors can call the IRS disaster assistance line at 866-562-5227. IRS representatives will answer questions about tax relief or disaster-related tax issues.

Be sure to educate employees on data security to protect both them and your business. There are a number of resources available, such as IRS Identity Theft Central and security awareness publications, to provide comprehensive training and awareness.

Taxpayers have several avenues to report scams:

Report suspicious IRS or tax-related scams to phishing@irs.gov.
Inform the IRS of data losses related to W-2 scams at dataloss@irs.gov.
Notify states of any disclosures of identity information at statealert@taxadmin.org.

For additional information on scams, visit IRS.gov/scams. Along with IRS.gov, the IRS routinely publishes helpful information on IRS social media. Follow @IRStaxsecurity on X for scam awareness information.

Source: IRS-2025-57, May 8, 2025

by Larson Accounting

5 de May de 2025

The Internal Revenue Service celebrates National Small Business Week, May 4-10, with important tools and insights for entrepreneurs and small business owners to protect their businesses and successfully navigate tax filing requirements.

For over 60 years the U.S. Small Business Administration has celebrated National Small Business Week. The IRS supports this annual tradition, honoring the small businesses that serve as the backbone of our nation’s economy.

During National Small Business Week, the IRS will highlight important tax topics to help small business entrepreneurs prosper and grow:

Monday, May 5

Best practices for small businesses

The IRS strongly encourages small business entrepreneurs to take advantage of the resources available on IRS.gov. Knowing how to start a business and understanding best practices are essential for success.

Tuesday, May 6

Tips for tax professionals who support small businesses

Stay informed with the latest IRS updates and resources tailored for tax professionals.

Wednesday, May 7

Delivering cutting edge technology

The IRS offers a suite of digital tools and technology designed to assist small businesses with managing tax responsibilities efficiently.

Thursday, May 8

Beware of scams

Business owners should remain vigilant against common scams. Fraudsters use mail, telephone and email to scam individuals, businesses and payroll and tax professionals. Businesses should implement safeguards to avoid these scams.

IRS national webinar at 2 p.m. ET

Small business, big tools: Free resources from the IRS that will lead to success.

Friday, May 9

Proactively plan and prepare

Know how to protect financial and tax records in case of a disaster and what support is available from the IRS in the event of a disaster declaration.

Stay informed, educated

There are a variety of resources available to help current and future small business owners understand the world of tax responsibilities, benefits and filing. The education and online learning products offered on IRS.gov ensure small businesses have the latest tax related information for their enterprise.

Webinars for small businesses

Topics vary from a general overview of taxes to more specific topics such as what constitutes business income and expenses.

Workshops, meetings and seminars

Scheduled events held throughout the country; on occasion, the IRS participates in these events virtually.

e-News for small businesses is a free email service that features the latest news, upcoming tax date reminders and tips to help small businesses.

Standard mileage rates

Current information for the many business owners who use their car for business.

Current tax tips

Up-to-the-minute tips to help taxpayers and businesses.

Along with IRS.gov, the IRS routinely publishes helpful information on YouTube, Facebook, X, LinkedIn and Instagram

Source: IRS-2025-56, May 2, 2025

by Larson Accounting

2 de May de 2025

The Internal Revenue Service reminds taxpayers that disaster preparation season kicks off soon with National Wildfire Awareness Month in May and National Hurricane Preparedness Week, May 4-10.

With tax season over and peak periods for disasters approaching, now is a good time for taxpayers to think about protecting important tax and financial information as part of a disaster emergency plan.

Disasters can have an immediate and lasting impact on individuals, organizations and businesses. Year-round preparation is important, and observing Hurricane Preparedness Week and Wildfire Awareness Month provides an opportunity for an annual assessment of readiness.

So far in 2025, the Federal Emergency Management Agency (FEMA) has issued 12 major disaster declarations in nine states impacted by winter storms, flooding, tornadoes, wildfires, landslides and mudslides. For current disaster declarations and information on how declarations are made, see FEMA’s Current Disasters page.

The IRS offers tips to help taxpayers protect personal financial and tax information when disaster hits.

Protect and make copies of important documents
Original documents such as tax returns, Social Security cards, marriage certificates, birth certificates and land ownership documents need to be secured in a waterproof container in a safe space. Taxpayers are also encouraged to make copies of these important documents and store them in a secondary location such as a safe deposit box or with a trusted person who lives in a different area. In addition, scanned documents can be stored on a flash drive for easy portability.

Keep a record of valuables
Taxpayers should use cell phones or other mobile devices to make a record of high-value items. A simple list with current photos or videos can help support claims for insurance or tax benefits after a disaster. The IRS disaster loss workbooks in Publication 584, Casualty, Disaster and Theft Loss Workbook (Personal-Use Property), and Publication 584-B, Business Casualty, Disaster and Theft Loss Workbook, can help individuals and businesses make lists of belongings or business equipment.

Rebuilding records
Reconstructing or replacing records after a disaster may be required for tax purposes, claiming federal assistance or insurance reimbursement. Accurate loss estimates could mean more loan and grant money may be available. Taxpayers who have lost some or all their records during a disaster should visit IRS’s Reconstructing records webpage as a first step.

Employers should check fiduciary bonds
Disasters can impact a business’ ability to make timely federal tax deposits. Employers using payroll service providers should check if the provider has a fiduciary bond in place that can protect the employer in the event of default by the payroll service provider. The IRS reminds employers to choose their payroll service providers carefully.

IRS can provide tax relief after a disaster
After FEMA issues a major disaster or emergency measures declaration, the IRS may postpone certain tax filing and payment deadlines for taxpayers who reside or have a business in certain counties affected by the disaster. The IRS provides details on states and counties that have been issued relief on the IRS Disaster relief page.

Taxpayers in the affected areas do not need to call to request this relief. The IRS automatically identifies taxpayers located in the covered disaster area and applies filing and payment relief. Those impacted by a disaster can contact the IRS Disaster Hotline at 866-562-5227 to ask their tax-related questions of an IRS specialist trained to handle disaster-related issues.

Taxpayers who do not reside or have a business in a covered disaster area but suffered impact from a disaster should call 866-562-5227 to find out if they qualify for disaster tax relief and to discuss other available options.

Source: IRS-2025-55, April 30, 2025

by Larson Accounting

29 de April de 2025

The Internal Revenue Service is facing a busy and uncertain future, with major staffing cuts, a decrease in funding, and turnover — including a veritable revolving door of acting commissioners, as Gary Shapley was replaced just days after Melanie Krause stepped down — with more cuts by DOGE looming ahead.

Ian Comisky, a partner at law firm Fox Rothschild LLP, believes the IRS “is not operating properly” and is being “taken apart.”

Comisky, who specializes in civil and criminal tax litigation, anticipates growing and continued chaos. The IRS is currently at least 20% understaffed, and that will only grow as cuts continue, he predicted. The agency was given more money in the Inflation Reduction Act of 2022 to improve its efficiency, but of that a huge amount was clawed back. Of the amount designated, cuts were made across the board, affecting enforcement, operations, modernization and taxpayer support services.

“The latest studies show that mostly enforcement dollars were reduced, and in the last go-round modernization resources were also cut,” said Comisky. “There was a voluntary reduction in force last month. Criminal agents that could help deal with noncompliance have been sent to the border. Some say we could lose as much as $1.6 trillion in revenue, although one view is that we can get enough from tariffs to make it all up.”

The current situation is that there are not enough resources for audits necessary to keep the system honest, while modernization is not being pursued.

There has also been a tremendous brain drain, according to Comisky: “The people that are left are less experienced. The appeals unit is reluctant to settle cases for fear of criticism. If they cut enforcement without modernizing, the agency can’t operate effectively.”

The reality is that cuts are being made across the board, according to Kelly Myers, a 30-year IRS veteran who now heads up Myers Consulting Group LLC.

“The cuts are not restricted by job or by office or to overhead-type individuals,” he said. “And not to outreach folks or compliance staff. It’s everybody. There will have to be a transition to a balance between how they execute their priority mission with the people they will have. Response times will be longer because they simply have fewer people. Filed returns with no exception on the return should come out OK. But if there is an exception, someone has to look at it and that will take longer to resolve. For example, 16 weeks will become 20 weeks. Likewise, amended returns have to be manually processed.”

Is this all by design? The effect has not been anticipated, according to Comisky. “The smartest, and those who can work elsewhere, are leaving now,” he explained. “Some of the big law firms believe that there will be no tax litigation for the next couple of years. Some are predicting that the feds will get the benefit of state audits. The sense is, if there is no enforcement, school’s out!”

Intuitively, Myers said he expects that all this means revenue will be down, but he’s not sure how much it will be down. “I’ve had exams that have been closed, shut down because of lack of staff. There are things the IRS would have asked questions about at an earlier time, which would have clarified issues, but they’re not asking questions anymore.”

“When there is less coverage, noncompliance will increase, since no one is looking over your shoulder,” he added. “Some things will not get done. As a former commissioner said some years ago, they won’t do more with less resources, they’ll do less with less resources.”

Source: Accounting Today

by Larson Accounting

28 de April de 2025

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As the May 15 filing deadline approaches for tax-exempt organizations, the Internal Revenue Service highlights important forms and topics to ensure successful and timely filing.

The annual filing due date for certain returns filed by tax-exempt organizations is the 15^th day of the 5^th month after the end of an organization’s accounting period. Those operating on a calendar year basis must file a return by May 15. Returns due include:

Form 990-series annual information returns (Forms 990, 990-EZ, 990-PF)
Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required to File Form 990 or Form 990-EZ
Form 990-T, Exempt Organization Business Income Tax Return (other than certain trusts)
Form 4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code

Electronic filing

Electronic filing ensures acknowledgement that the IRS has received the return and reduces processing time, making it easy to comply with reporting requirements. Organizations should remember the following when e-filing:

Organizations filing a Form 990, 990-EZ, 990-PF or 990-T for calendar year 2023 must file their returns electronically.
Private foundations filing a Form 4720 for calendar year 2023 must file the form electronically.
Charities and other tax-exempt organizations can file these forms electronically through an IRS authorized e-file provider.
Organizations eligible to submit a Form 990-N must do so electronically and can submit it through Form 990-N (e-Postcard)on IRS.gov.

Common errors

The IRS encourages organizations to thoroughly review their forms to avoid common errors such as missing or incomplete schedules. If an organization’s return is incomplete or is the wrong return for the organization, the return will be rejected.

Extension requests

Tax-exempt organizations may request a six-month automatic extension by filing a Form 8868, Application for Extension of Time to File an Exempt Organization Return PDF. In situations where tax is due, extending the time for filing a return does not extend the time for paying tax.

Online workshops

The IRS provides online workshops to help tax-exempt organizations comply with filing requirements. These workshops are designed to help organizational leadership understand the benefits, limitations and expectations of exempt organizations.

Press: IRS-2025-54, April 25, 2025

by Larson Accounting

21 de April de 2025

The Internal Revenue Service Whistleblower Office released its first-ever multi-year operating plan PDFoutlining guiding principles, strategic priorities, recent achievements and current initiatives to advance the IRS Whistleblower Program.

The IRS Whistleblower Office administers claims from whistleblowers that identify taxpayers who may not be complying with tax laws or other laws the IRS administers, enforces or investigates.

“The IRS Whistleblower Office Operating Plan incorporates extensive feedback received from whistleblowers, whistleblower practitioners, IRS employees, oversight bodies and other program stakeholders,” said IRS Whistleblower Office Director John Hinman. “Whistleblower information that the IRS can act on is an important component of effective tax administration as it bolsters the fair, efficient and effective enforcement of our nation’s tax laws, the success of our voluntary tax system and our efforts to reduce the tax gap.”

The plan reflects a multi-year approach to improving processes and operations, expanding collaboration and outreach and integrating valuable stakeholder feedback.

The operating plan is framed around six strategic priorities:

Enhance the claim submission process to promote greater efficiency.
Use high-value whistleblower information effectively.
Award whistleblowers fairly and as soon as possible.
Keep whistleblowers informed of the status of their claims and the basis for IRS decisions on claims.
Safeguard whistleblower and taxpayer information.
Ensure that our workforce is supported with effective tools, technology, training and other resources.

Within these six strategic priorities, there are 38 initiatives addressing short-term and long-term focus areas to advance the program. Some of the initiatives will require completion of detailed, specific activities while other initiatives are broad. The plan identifies areas of significant importance while allowing flexibility to address other concerns that may arise.

The IRS is committed to continuous improvement of the Whistleblower Program through ongoing collaboration with program stakeholders.

Assistance from whistleblowers

The IRS appreciates the valuable assistance it receives from whistleblowers and the whistleblower practitioner community. An effective whistleblower program provides an invaluable deterrence against non-compliance with tax laws, and whistleblower information significantly boosts revenues while improving tax fairness.

Since the inception of the IRS Whistleblower Office in 2007, the Whistleblower Office has made awards of over $1.3 billion based on the collection of more than $7 billion attributable to whistleblower information. In fiscal year 2024, the IRS paid awards totaling $123.5 million based on tax and other amounts collected of $474.7 million attributable to whistleblower information. The total dollar amount of awards paid in fiscal year 2024 was the third highest in the program’s history. The awards paid to whistleblowers generally range between 15% and 30% of the proceeds collected and attributable to their information.

Individuals with specific, timely, credible, relevant and significant information regarding non-compliance with any laws the IRS is authorized to administer, enforce or investigate are encouraged to consider filing a Form 211, Application for Award for Original Information PDF, to be considered for an award.

Source: IRS-2025-53, April 18, 2025

by Larson Accounting

14 de April de 2025

The Internal Revenue Service reminds self-employed individuals, retirees, investors, businesses and corporations that April 15 is the deadline for first quarter estimated tax payments for tax year 2025.

Because federal income taxes are pay-as-you-go, the law requires individuals who don’t have taxes withheld to pay taxes as their income is received or earned throughout the year. Most people meet their tax obligations by having their taxes deducted from their paychecks, pension payments, Social Security benefits or certain other government payments including unemployment compensation.

Taxpayers who are self-employed or in the gig economy are generally required to make estimated tax payments. Likewise, retirees, investors and others frequently need to make these payments because a significant portion of their income is not subject to withholding.

When estimating quarterly tax payments, taxpayers should include all forms of earned income, including part-time work, side jobs or the sale of goods or services, commonly reported on Form 1099-K.

Income such as interest, dividends, capital gains, alimony and rental income is normally not subject to withholding. By making quarterly estimated tax payments, taxpayers can avoid penalties and uphold their tax responsibilities.

Certain groups of taxpayers, including farmers and fishers, recent retirees, individuals with disabilities, those receiving irregular income and victims of disasters and terrorist attacks are eligible for exceptions to penalties.

Paying estimated taxes

Taxpayers can rely on Form 1040-ES, Estimated Tax for Individuals, for comprehensive instructions on computing their estimated taxes.

IRS Online Account streamlines the payment process for taxpayers making estimated payments. There, they can make and view their payment history, monitor pending payments and access pertinent tax information.

Taxpayers have several options to make an estimated tax payments, by mail or pay online with IRS Direct Pay, debit card, credit card, digital wallet or the Treasury Department’s Electronic Federal Tax Payment System.

To pay electronically and for more information on other payment options, visit Make a payment. If paying by check, be sure to make the check payable to the “United States Treasury”.

Publication 505, Tax Withholding and Estimated Tax, offers detailed information for individuals navigating dividend or capital gains income, alternative minimum tax or self-employment tax, or who have other special situations.

Source: IRS-2025-45, April 10, 2025

by Larson Accounting

7 de April de 2025

The Internal Revenue Service today reminds individuals and businesses in areas covered by 2024 disaster declarations that their 2024 federal income tax returns and tax payments for tax year 2024 are due on Thursday, May 1, 2025. Taxpayers in three additional states face fall deadlines.

The IRS normally provides relief, including postponing various tax filing and payment deadlines for any area designated by the Federal Emergency Management Agency (FEMA). If a taxpayer’s address of record is in a disaster area locality, individual and business taxpayers automatically get the extra time without having to ask for it.

The current list of eligible localities is always available on the Tax relief in disaster situations page on IRS.gov.

What areas qualify for the May 1, 2025, deadline?

The May 1, 2025, deadline applies to taxpayers affected by FEMA disaster declarations issued during 2024. These include:

Taxpayers in the entire states of Alabama, Florida, Georgia, North Carolina and South Carolina
Alaska – The City and Borough of Juneau
New Mexico – Chaves County
Tennessee – Carter, Claiborne, Cocke, Grainger, Greene, Hamblen, Hancock, Hawkins, Jefferson, Johnson, Sevier, Sullivan, Unicoi and Washington counties
Virginia – Albemarle, Appomattox, Bedford, Bland and Botetourt counties; Bristol City; Buchanan, Buckingham, Carroll and Charlotte counties; Covington City; Craig County; Danville City; Dickenson and Floyd counties; Galax City; Giles, Grayson, Greene, Lee, Madison, Montgomery and Nelson counties; Norton City; Patrick, Pittsylvania and Pulaski counties; Radford City; Roanoke City; Roanoke, Russell, Scott, Smyth, Tazewell, Washington, Wise and Wythe counties

Further tax filing extensions available

Anyone who needs a tax filing extension beyond May 1, 2025, for tax year 2024 can get it, but they must request the extra time. This type of filing extension is not an extension of time to pay.

The IRS urges anyone who needs an extension to request it electronically by April 15, 2025. Though disaster-area taxpayers also qualify to request a tax filing extension between April 15 and May 1, 2025, these requests cannot be filed electronically. They can be filed only on paper using Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return.

Whether filed electronically or on paper, the extension will give a taxpayers until Oct. 15, 2025, to file their 2024 return. The IRS emphasized that tax payments are still due by May 1, 2025. Visit IRS.gov/extensions for details.

Reminder for other disaster area taxpayers

In addition, individuals and businesses can wait until this fall to file their 2024 returns and pay any taxes due. This includes:

Oct. 15, 2025, for Los Angeles County in California, related to the January wildfires.
Nov. 3, 2025, for all of Kentucky and Boone, Greenbrier, Lincoln, Logan, McDowell, Mercer, Mingo, Monroe, Raleigh, Summers, Wayne and Wyoming counties in West Virginia.

Special relief for terrorist attacks in Israel

Taxpayers who live or have a business in Israel, Gaza or the West Bank, and certain other taxpayers affected by the terrorist attacks in the State of Israel have until Sept. 30, 2025, to file and pay. This includes most returns and taxes due from Oct. 7, 2023, through Sept. 30, 2025, including Form 1040 and 1120 series returns.

What returns and payments qualify for automatic extension?

Eligible returns and payments include:

Calendar year 2024 partnership and S Corporation returns normally due on March 17.
2024 individual income tax returns and payments normally due on April 15.
Quarterly estimated tax payments normally due on April 15.
Calendar year 2024 corporate and fiduciary income tax returns and payments normally due on April 15.

Other returns, payments and time-sensitive tax-related actions also qualify for the extra time. See the Disaster assistance and emergency relief for individuals and businesses page for details.

Other relief

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Taxpayers do not need to contact the agency to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting with relief activities who are affiliated with a recognized government or philanthropic organization.

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred or the return for the prior year. See Publication 547, Casualties, Disasters, and Thefts, for details.

Source: IRS-2025-41, April 4, 2025

by Larson Accounting

4 de April de 2025

The Internal Revenue Service today reminds taxpayers that they don’t need to wait until April 15 to file their 2024 federal return, and if they owe and are unable to pay the balance in full, there are payment plans available to help them pay their tax obligation.

Tax returns for 2024 are due on April 15, 2025, with exceptions for taxpayers in a disaster area, combat zone or living and working abroad. April 15 is also the deadline for making tax payments to avoid late charges such as interest and the late payment penalty.

The IRS urges those who cannot pay their full balance to file and pay as much as they can on or before April 15. Filing on time avoids the late filing penalty, which is usually 5% per month on the unpaid balance.

In addition, by paying at least part of what they owe on time, taxpayers can reduce the amount of interest and late payment penalty that will be added to any payments made after April 15. Currently, the interest rate is 7% per year, compounded daily, and the penalty rate is usually 0.5% (one-half of one percent) per month.

For anyone with unpaid tax, the IRS cautions that requesting an extension is not a solution because it only gives a taxpayer more time to file, not more time to pay.

Online payment plan options

Most individual taxpayers qualify for a payment plan. The quickest and easiest way to set up a payment plan is through the Online payment agreement, available on IRS.gov. Setup fees may apply.

Short-term payment plan – The total balance owed is less than $100,000 in combined tax, penalties and interest. This gives a taxpayer up to 180 days to pay their balance in full.
Long-term payment plan – New Simple payment plan criteria make it easier and more accessible to enter a long-term payment plan when the total balance owed is less than $50,000 in combined tax, penalties and interest. Taxpayers may pay in monthly payments for up to the collection statute, usually 10 years. Payments may be set up using direct debit (automatic bank withdrawal), which eliminates the need to send in a payment each month, saves postage costs and reduces the chance of default. Taxpayers should remember that extending the time to pay will increase the applicable interest, penalties and fees.

Once the online application is complete, the taxpayer is notified immediately whether their plan is approved. There’s no paperwork and no need to call, write or visit the IRS.

Other payment options

Anyone who cannot qualify for an online payment plan can explore other options, such as:

Offer in compromise – Some taxpayers qualify to settle their tax liabilities for less than the total amount owed by submitting an Offer in Compromise. Taxpayers should use the Offer in Compromise Pre-Qualifier tool on IRS.gov to see if they qualify.
Temporary delay of collection – Taxpayers can contact the IRS to request a temporary delay of the collection process. If the IRS determines that the taxpayer is unable to pay, it may delay collection until the taxpayer’s financial condition improves. Penalties and interest continue to accrue until the full amount is paid.

Taxpayers can get details on these options and more by reviewing Tax Topic 202, Tax payment options, on IRS.gov, or by contacting the IRS using the information on their most recent notice.

Beware of scams

The IRS will not call, text or contact anyone via social media to demand immediate tax payment. Instead, the agency usually contacts taxpayers by mail with a bill, letter or notice explaining what they owe and how to question or appeal any amount due. See information on scams on IRS.gov.

Any taxpayer who is unsure whether they have an unpaid IRS bill can view their tax information using their Individual Online Account on IRS.gov.

Source: IRS-2025-40, April 3, 2025

by Larson Accounting

31 de March de 2025

The Earned Income Tax Credit (EITC) has played a crucial role in helping millions of low-to-moderate income workers out of poverty. Saturday, March 29, 2025, marks the 50th anniversary of this important credit.

A component of the Tax Reduction Act, EITC was signed into law by President Gerald Ford on March 29, 1975. What began as a modest means to provide financial help to working families has evolved through a series of legislative changes into one of the federal government’s largest anti-poverty programs.

Over the past 50 years, the EITC has had a significant impact in the lives of eligible taxpayers claiming the credit. As of Dec. 2024, approximately 23 million workers and families received about $64 billion from EITC.

In 1975, the maximum credit amount for EITC was $400. For tax year 2024, the EITC can be up to $7,830. Today, the EITC continues to provide financial assistance to low-to-moderate income working families and individuals, with or without children, by helping them cover essentials, save for the future and build financial stability.

Taxpayers can use the EITC Assistant to determine their eligibility. Those that are eligible can learn how to claim the credit on IRS.gov.

Source: IRS-2025-38, March 28, 2025

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