Northwest Wayne News

Michigan Governor Gretchen Whitmer and the Michigan Department of Treasury are encouraging eligible families and individuals to claim both the federal and state Earned Income Tax Credit (EITC) while filing their 2021 income taxes. People who qualify and claim the credit might pay less in federal income tax, pay no taxes or even get a tax refund.

Governor Whitmer's FY23 budget recommendation capitalizes on the chance Michigan has to cut taxes for the state's families by tripling the Michigan EITC to pull 22,000 Michiganders out of working poverty and bring 730,000 households an average combined tax refund of $3,000 starting with the tax year 2022.

"I strongly encourage all eligible Michiganders to claim the Earned Income Tax Credit," Michigan State Treasurer Rachael Eubanks said. "It's been a challenging year for many residents and the extra income this tax credit provides can be really helpful to working families. Please take the opportunity to claim the EITC on both your federal and state individual income tax returns -- every refund helps Michigan families care for their children and meet living expenses."

To be eligible 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 the 2021 return (including extensions), be a U.S. citizen or a resident alien all year and not have filed Form 2555 (related to foreign earned income). Michigan EITC calculation instructions are given out on the MI-1040. Tax preparation software calculates the state EITC if the federal EITC is granted. 

When a federal EITC is granted, the state of Michigan will give out a 6% supplemental EITC if the taxpayer files a state individual income tax return. For the 2020 tax year, around 713,000 Michigan taxpayers got the federal EITC, for a combined credit of nearly $1.8 billion and an average credit value of $2,467.