LANSING — Governor Whitmer and the state’s treasury are encouraging eligible families and individuals to claim both the federal and state Earned Income Tax Credit (EITC) when filing their 2021 income taxes.
Those who qualify and claim the credit could pay less federal tax, pay no tax or even get a tax refund.
The Michigan Department of Treasury estimates thousands of Michiganders are eligible for both the federal and state EITCs and do not claim them each year.
For the 2020 tax year, approximately 713,000 Michigan claimants received the federal EITC, totaling almost $1.8 billion with an average credit amount of $2,467.
This year, the tax relief is meant to deliver 730,000 Michigan households an average combined tax refund of $3,000.
To qualify for the EITC, individuals must:
- Have worked and earned income under $57,414
- Have investment income below $10,000 in the tax year 2021
- Have a valid Social Security number by the due date of your 2021 return (including extensions)
- Be a U.S. citizen or a resident alien all year
- Not file Form 2555 (related to foreign earned income)
The EITC calculation instructions are provided on the MI-1040 form. Tax preparation software calculates the state EITC if the federal EITC is granted. If a federal EITC is granted, the state of Michigan will provide a 6 percent supplemental EITC when the taxpayer files a state individual income tax return.
Governor Whitmer’s fiscal year 2023 budget recommendation includes tax cuts for families by tripling the Michigan EITC to “pull 22,000 Michiganders out of working poverty,” a press release read.
“We can all agree that after a tough few years, extra money in your pocket will make a difference,” Governor Whitmer said on Thursday. “But too many eligible families don’t file for the EITC. So today, I am encouraging every eligible Michigan family to take advantage of this tax credit this year. It’ll get more money back to Michiganders at a time they can really use it.”