The tax filing deadline is quickly approaching. Working seniors may qualify for the earned income tax credit when they file their 2021 tax returns due on Monday, April 18, 2022. The tax credit assists those with low incomes but was previously only available to those with young children.
For those with income below a certain level, the earned income tax credit (EITC) may lower the amount of taxes owed and even help some qualify for a refund. If the senior receives a refund, it is not considered income for the purposes of qualifying for government benefits like Medicaid, Supplemental Security Income (SSI) or Section 8 housing.
Previously this credit only applied to those ages 25 to 64, but now seniors age 65 and older can claim the credit if they have earned income. Earned income includes wages, salaries, tips, work-for-hire contracts and income derived from being self-employed. On the other hand, earned income does NOT include Social Security, government benefits, or income derived from investments, annuities or pensions. For 2021 tax returns only, the IRS has lifted the child requirement.
You can stop filing income taxes at age 65 if:
However, if you are married, filing jointly, and your spouse is not 65, you will have to make less than $25,700 to avoid paying taxes.
There are certain circumstances when seniors must add their Social Security benefits in their gross income. If you are married and file an individual tax return and reside with your spouse during the year, 85% of your Social Security benefits are deemed gross income which may warrant you to file a tax return. Additionally, an allotment of your Social Security benefits are included in gross income, no matter your status, in any year the total of half your Social Security including all other income, tax-exempt interest, exceeds $25,000 or $32,000 if you are married and filing jointly.
You can get free Maryland income tax assistance in person or over the phone by contacting the state Comptroller’s Taxpayer Service at 1-800-MD-TAXES (1-800-638-2937). You can also e-mail your tax questions to taxhelp@comp.state.md.us.
At Stouffer Legal, we aim to provide information to help Maryland seniors. If you need assistance with estate planning, retirement planning or long-term care planning, contact our experienced elder law attorneys. You can schedule an appointment by calling us at (443) 470-3599 or emailing us at office@stoufferlegal.com.