The Earned Income Tax Credit requires you to have earned income, fall within specific income limits, and meet citizenship rules

The Earned Income Tax Credit (EITC) is a refundable tax credit for people who work but earn below certain income thresholds. You must have earned income — wages from a job, self-employment income, or certain other work-related payments — to claim it. The IRS does not hand out the credit based on need alone; you have to have actually worked and earned money during the tax year.

The credit phases out as your income rises, so there is a ceiling. For 2023, that ceiling depends on your filing status and how many children you claim as dependents. A single person with no children can earn up to $16,810 and still claim the credit. A married couple filing jointly with three or more children can earn up to $56,838. These numbers change each year, and the IRS publishes them in the instructions to Form 1040.

You also must be a U.S. citizen, national, or resident alien for the entire tax year. If you are filing jointly with a spouse, both of you must meet this requirement. If you do not, neither of you can claim the EITC, even if one spouse qualifies on their own.

Key Takeaways

  • You must have earned income from work — wages, self-employment, or similar sources — to claim the EITC; investment income does not count.
  • Your total income must fall below the IRS limit for your filing status and number of dependents, which changes yearly.
  • You must be a U.S. citizen, national, or resident alien for the entire tax year to claim the credit.
  • The credit is larger if you have dependent children, and the amount increases with each child up to a limit.
  • You claim the EITC on Form 1040 using Schedule EIC if you have may have access to children, or by entering the information directly if you do not.

Income limits vary by filing status and number of dependents

The IRS sets a different income ceiling for each combination of filing status and dependent count. If you file as single with no children, your income limit is lower than if you file as head of household with two children. The credit is designed to help working people with lower incomes, so the limits reflect that intent.

To find the exact limit for your situation, look at the EITC income limits table in the Form 1040 instructions for the year you are filing. The IRS updates these limits annually for inflation. You can also find them on the IRS website under "EITC" or by calling the IRS at 1-800-829-1040. If your income is at or below the limit for your filing status and dependent count, you may be able to claim the credit.

Income includes wages, salaries, tips, and net self-employment income. It also includes certain other sources like taxable scholarship and fellowship grants, or taxable disability benefits if you have not reached full retirement age. It does not include Social Security benefits, unemployment benefits, or investment income like interest or capital gains.

Dependent children must meet specific relationship and age rules

The EITC credit amount is larger if you have may have access to children, and it grows with each child. But the child must meet four tests: relationship, age, residency, and citizenship.

The child must be your son, daughter, stepchild, foster child, brother, sister, or a descendant of any of these (like a grandchild or niece). They must be under age 17 at the end of the tax year. They must have lived with you for more than half the year — not counting temporary absences for school, medical care, military service, or detention. And they must be a U.S. citizen, national, or resident alien.

If a child meets all four tests, you can claim them as a dependent and use them to increase your EITC. The credit is highest with three or more may have access to children. If you have no may have access to children, you can still claim the EITC if your income is low enough, but the credit amount is smaller.

Self-employed workers and gig workers can claim the EITC

If you are self-employed or work in the gig economy — driving for a rideshare service, freelancing, selling items online — your net self-employment income counts as earned income for the EITC. You calculate net self-employment income on Schedule C (Form 1040), which is where you report business income and expenses.

To claim the EITC with self-employment income, you must file a full tax return, not just a 1040-EZ or a simplified form. You will need to complete Schedule C to show your gross income minus business expenses, then use that net figure on your Form 1040. The EITC is then calculated based on that net self-employment income plus any wages you earned from other jobs.

If your net self-employment income is zero or negative — meaning your business expenses exceeded your income — you cannot claim the EITC that year. The credit requires positive earned income.

Married couples filing jointly have different rules than married filing separately

If you are married, you can file jointly or separately. The EITC is available only if you file jointly. If you file married filing separately, neither spouse can claim the EITC, even if one spouse would otherwise may have access to on their own.

When you file jointly, the IRS combines both spouses' incomes to determine whether you fall within the income limit. Both spouses must also meet the citizenship and residency rules. If one spouse is not a U.S. citizen, national, or resident alien, you cannot claim the EITC as a couple.

Filing jointly usually results in a larger EITC than filing separately would, so most couples who are may be able to access choose to file jointly. If you are unsure whether filing jointly or separately is better for your situation, you can prepare your return both ways and compare the results before you file.

How to claim the EITC on your tax return

You claim the EITC on Form 1040 (the main individual income tax form). If you have may have access to children, you also complete Schedule EIC, which lists the children and their Social Security numbers. If you have no may have access to children, you enter the EITC amount directly on Form 1040 line 1773 (for 2023; line numbers change yearly).

The IRS provides a worksheet in the Form 1040 instructions to help you calculate the credit amount. You can also use the EITC Assistant on the IRS website, which asks you questions about your income, filing status, and dependents and tells you whether you may be able to claim the credit and how much it might be. This tool is free and does not require you to provide personal information.

If you use tax preparation software or file with a tax professional, they will ask you the questions needed to determine your EITC and will calculate it for you. You do not have to do the math yourself. The key is to have all your income documents (W-2s, 1099s, business records) and your children's Social Security numbers ready when you file.

Frequently Asked Questions

Can I claim the EITC if I did not earn enough to owe taxes?

Yes. The EITC is refundable, which means you can claim it even if you owe no income tax. If the credit is larger than the tax you owe, the IRS sends you the difference as a refund. This is one reason the EITC is valuable for low-income workers — you may receive money back even if you had no tax liability.

What if I have a child from a previous relationship — can I claim them for the EITC?

Only if the child meets all four tests: they are your biological child, stepchild, or adopted child (or a descendant); they are under 17; they lived with you for more than half the year; and they are a U.S. citizen, national, or resident alien. If another parent also claims the child, the IRS will disallow one of the claims and may impose penalties, so make sure only one person claims each child.

Do I have to file a tax return to claim the EITC?

Yes, you must file Form 1040 to claim the EITC. You cannot claim it on a simplified form or without filing. Even if your income is so low that you would not normally have to file, you should file to claim the EITC because it may result in a refund.

What happens if the IRS thinks I claimed the EITC incorrectly?

The IRS may send you a notice asking for proof that your children meet the relationship, age, residency, and citizenship tests. Keep copies of birth certificates, school records, and proof of residency (like utility bills) for at least three years after you file. If you cannot provide proof, the IRS will disallow the credit and may ask you to repay it.

Can I claim the EITC if I am a resident alien?

Yes, if you are a resident alien for tax purposes for the entire tax year. A resident alien is generally someone who has a green card or meets the substantial presence test (roughly 183 days in the U.S. over three years). Nonresident aliens cannot claim the EITC. If you are unsure of your status, see Form 8840 or speak with a tax professional.