What the Earned Income Tax Credit is
The Earned Income Tax Credit (EITC) is a refundable tax credit for people who work but earn low to moderate income. Unlike most tax credits, which reduce what you owe, the EITC can result in a refund even if you owe no tax at all — meaning you may receive money back from the IRS beyond what was withheld from your paychecks.
The credit is designed to reduce the tax burden on working people and, in many cases, to put money in their pockets. The amount you receive depends on your income, filing status, and whether you have children. The IRS administers the EITC, and you claim it when you file your federal tax return.
The credit phases in as your income rises to a certain point, stays flat at its maximum, then phases out as income increases further. This structure means the benefit is largest for people earning the least, but it remains available across a wider income range than many other information programs.
Key Takeaways
- The EITC is a refundable credit, meaning you can receive money back even if you owe no federal income tax.
- Your EITC amount depends on your income, filing status, and the number of may have access to children you claim.
- You must have earned income from work to claim the EITC — investment income or unemployment benefits do not count.
- You claim the EITC by filing a federal tax return, either on your own or with help from a free tax preparation service.
- The IRS provides the EITC; no separate process or enrollment is needed beyond filing your return.
Income limits and credit amounts vary by filing status and children
The EITC has different income thresholds and maximum credit amounts depending on whether you file as single, head of household, or married filing jointly, and on how many may have access to children you claim. The IRS updates these limits and amounts each year based on inflation.
For the 2023 tax year (filed in 2024), the maximum credit for someone with no may have access to children is smaller than for someone with one, two, or three or more children. The income range at which you receive the full credit is also narrower for filers without children. As your income rises beyond the maximum credit range, the credit amount decreases until it reaches zero.
Because these figures change annually and depend on your specific situation, the IRS website and the tax forms themselves (Form 1040 and Schedule EIC) contain the exact numbers for the year you are filing. Free tax preparation services can also calculate your EITC based on your actual income and family structure.
Who can claim the EITC
To claim the EITC, you must have earned income from work — wages, salary, or self-employment income. You cannot claim the credit if your only income comes from investments, unemployment benefits, Social Security, or other non-work sources.
You must also meet age and residency requirements. If you have no may have access to children, you must be at least 25 years old and under 65 at the end of the tax year, and you must have lived in the United States for more than half the year. If you claim may have access to children, the age rules do not explore to you, but the children must meet their own requirements: they must be your son, daughter, stepchild, foster child, brother, sister, or a descendant of any of these, and they must be under 17 at the end of the tax year (or under 24 if a full-time student, or any age if permanently disabled).
Your income must fall below the IRS limit for your filing status and number of children. You cannot claim the EITC if your investment income exceeds a certain amount in the year you file.
How to claim the EITC when you file your taxes
You claim the EITC by filing a federal income tax return. If you normally would not file a return because your income is too low, you should file anyway to claim the credit — this is one of the main reasons people with low earned income file.
When you file, you will report your income and family information on Form 1040. If you have may have access to children, you will also complete Schedule EIC, which lists each child's name, age, and Social Security number. The IRS uses this information to calculate your credit.
You can file on your own using tax software, by mail, or through a free tax preparation service. Many communities offer free EITC tax filing through programs like the IRS Volunteer Income Tax information (VITA) program, which operates at libraries, community centers, and nonprofits. You can find a VITA site near you through the IRS website.
The difference between the federal EITC and state earned income credits
The federal EITC is separate from state-level earned income credits, though many states offer their own versions. Some state credits are a percentage of the federal credit (for example, 20 percent of what you receive federally), while others have their own income limits and amounts.
If you live in a state with an earned income credit, you may claim both the federal credit and the state credit on the same tax return. The state credit is claimed on your state tax form, not your federal form. Not all states offer an earned income credit, so whether you can claim one depends on where you live.
When you file through a free tax preparation service, the preparer will help you determine whether your state offers a credit and will include it on your state return if you are filing one.
What happens after you claim the EITC
Once you file your return, the IRS processes it and calculates your EITC. If you are owed a refund (including the EITC), the IRS will send it to you by direct deposit, check, or prepaid debit card, depending on how you requested it on your return.
The timing varies. Most refunds are issued within 21 days of the IRS receiving your return if you file electronically and request direct deposit. If you file by mail or request a check, it may take longer.
The IRS may verify your information after you file, especially if you claim children. This verification process can take several weeks or months. The IRS may ask you to provide documents such as birth certificates for your children, proof of your relationship to them, or proof of your income. Responding promptly to any IRS notice helps speed up the process.
Frequently Asked Questions
Do I have to file a tax return if my income is very low?
You are not required to file if your income is below the standard deduction for your filing status. However, if you have earned income and think you might be owed an EITC, you should file anyway — the credit can result in a refund even if you owe no tax. Filing is free through VITA or low-cost tax software.
Can I claim the EITC if I am self-employed?
Yes. Self-employment income counts as earned income for the EITC. You will report your net self-employment income on Schedule C and then claim the EITC based on that income. You will also owe self-employment tax, which is separate from the EITC.
What if I have a child but am not sure they may have access to?
A may have access to child must be your biological child, stepchild, foster child, sibling, or a descendant of any of these, and must be under 17 at the end of the tax year (or under 24 if a full-time student, or any age if permanently disabled). They must also have a valid Social Security number and live with you for more than half the year. A tax preparer can help you determine whether your child meets these rules.
What if the IRS says I claimed the EITC incorrectly?
The IRS will send you a notice explaining what they found. You have the right to respond and provide documentation to support your claim. If you disagree with the IRS decision, you can appeal through the IRS Office of Appeals. A tax professional or legal aid organization can help you respond to an IRS notice.
Can I claim the EITC if I am not a U.S. citizen?
You must have a valid Social Security number to claim the EITC. If you are not a U.S. citizen but have a work-authorized visa and a Social Security number, you may be able to claim the credit. An immigration attorney or tax professional can advise you based on your specific immigration status.