Big changes are coming to the District Earned Income Tax Credit in 2023!
The District Earned Income Tax Credit (DC EITC) is a refundable credit for low and moderate-income workers. For individuals with qualifying children, the DC EITC is based on a percentage of the amount of the federal earned income tax credit (federal EIC) reported on an individual’s federal income tax return. For past years, the amount of the DC EITC was 40% of the amount of the federal EIC. For tax year 2022, that percentage has been increased to 70% of the federal EIC.
For tax year 2022, individuals with qualifying children receiving the DC EITC will be paid differently than in the past. You will receive a refund equal to 40% of your federal EIC as usual after your return is processed. The additional 30% of the DC EITC, however, will be paid to you in monthly installments over the 11 months pursuant to District law. (If the amount of your refund is less than $600, this change will not apply to you and your refund will be paid as usual.)
In order for you to receive your monthly refund payments timely, it is important that you keep your address and banking information up to date with OTR throughout the year. You can ensure your information is up-to-date by logging in to your MyTax.DC.gov account or by calling our Customer Service Administration at (202) 724-4829.
The DC Earned Income Tax Credit (EITC) is a special tax break, based on the federal EITC, designed specifically for low- and moderate-income workers. People who qualify for the EITC will pay less in taxes or even get cash back.
Who is eligible for the DC EITC?
- Those District taxpayers who are allowed the Earned Income Tax Credit in filing their federal individual income tax return and did not claim the District Low Income Tax Credit.
- District taxpayers who do not qualify for the Earned Income Tax Credit for federal tax purposes can claim the credit on their District return if the taxpayer is:
- A District resident, and
- Between the ages of 18 and 30, and
- A parent of a minor child who does not live with the taxpayer, and
- A court has ordered the taxpayer to make child care support payments, and
- The court order is in effect for ½ of the year during the year that the taxpayer is claiming the credit, and
- The taxpayer paid child care support in the tax year claiming the credit equal to the amount of the child care support due during the year.
Taxpayers Without A Qualifying Child
Taxpayers without a qualifying child must use the DC Earned Income Tax Credit (EITC) Worksheet for Filers Without a Qualifying Child on page 12 to determine the DC EITC. You may need information from the federal instruction booklet concerning the Earned Income Credit to determine your eligibility for the DC Earned Income Tax Credit. If you do not have a qualifying child for the EITC and did not qualify for the federal credit due to your income, you may still qualify for the DC EITC.
What is the amount of the DC EITC?
- District taxpayers who are allowed the Earned Income Tax Credit in filing their federal individual income tax return and did not claim the District Low Income Tax Credit are allowed a DC EITC equal to 40 percent of the amount allowed by the Internal Revenue Service.
- District taxpayers who are parents of a minor child, are required to pay child support and who otherwise qualify are allowed a DC EITC equal to 40 percent of the amount that would have been allowed by the Internal Revenue Service.
In addition to the DC EITC, some working families with children can benefit from the federal Child Tax Credit. The District government wants all eligible city residents to claim these valuable tax credits.