The Earned Income Tax Credit amount depends on your income, filing status, and number of may have access to children

The Earned Income Tax Credit (EITC) is not a flat amount. The IRS sets a maximum credit for each situation, but what you actually receive depends on how much you earned that year. For 2023 tax returns (filed in 2024), the maximum credit ranges from $560 for workers with no children to $3,995 for those with three or more may have access to children. These amounts change each year because the IRS adjusts them for inflation.

Your actual credit is calculated using a formula based on your earned income. If you earned very little, the credit grows as your income rises — up to the maximum. Once your income passes a certain point, the credit begins to shrink. This means two people with the same number of children can receive different amounts depending on what they earned.

The income limits that determine whether you can receive the credit also vary by filing status and number of children. A single parent with one child has a different income limit than a married couple filing jointly with the same child. The IRS publishes these limits each year in the EITC tables on their website.

Key Takeaways

  • The maximum EITC for 2023 ranges from $560 with no children to $3,995 with three or more children, and these amounts change yearly for inflation.
  • Your actual credit amount depends on your earned income for the year — it increases as you earn more, then decreases once income passes a threshold.
  • Filing status (single, married filing jointly, head of household) and the number of may have access to children both affect your maximum credit and income limits.
  • The IRS publishes updated credit amounts and income limits each tax year on their EITC page and in Form 1040 instructions.

How the credit grows and shrinks based on your income

The EITC works in phases. In the first phase, called the "phase-in" period, your credit increases by a set percentage for every dollar you earn. For workers with no children, the credit increases by 7.65 percent of earned income. For workers with one child, it increases by 34 percent. For workers with three or more children, it increases by 45 percent. This phase continues until you reach the maximum credit amount.

Once you hit the maximum, your credit stays flat across a range of income levels. This is called the "plateau." During this range, earning more money does not change your credit amount.

After the plateau ends, the credit begins to decrease. This is the "phase-out" period. For every dollar you earn above the phase-out threshold, your credit shrinks by a percentage that matches the phase-in rate. If you earned too much, your credit reaches zero and you receive nothing.

Income limits for 2023 tax returns

The income threshold where your credit starts to shrink depends on your filing status and number of may have access to children. For single filers with no children in 2023, the phase-out began at $17,320 of earned income. For single filers with one child, it began at $44,492. For single filers with three or more children, it began at $50,162.

Married couples filing jointly have higher thresholds. With no children, the phase-out began at $23,120. With one child, it began at $50,292. With three or more children, it began at $55,962.

These numbers are specific to 2023. The IRS adjusts them each year, so the thresholds for 2024 returns will be different. You can find the current year's limits in the EITC tables on IRS.gov or in the instructions that come with Form 1040.

What counts as earned income for the EITC

The EITC is based on earned income, which means money you made from working. This includes wages, salaries, tips, and net self-employment income if you own a business. It does not include investment income, rental income, unemployment benefits, Social Security, or pension payments.

If you are self-employed, you calculate your earned income using Schedule C (Profit or Loss from Business). You subtract your business expenses from your gross business income to find your net self-employment income, which is what counts toward the EITC.

If you had both a job and self-employment income in the same year, you add both amounts together to find your total earned income for EITC purposes.

How to find your exact credit amount

The IRS publishes EITC tables each year that show the exact credit for different income levels, filing statuses, and numbers of children. These tables are in the Form 1040 instructions and on the EITC page at IRS.gov. You locate your filing status and number of may have access to children, find your earned income amount, and read across to find your credit.

If you use tax software or file with a tax preparer, the software or preparer calculates your credit automatically. You do not need to do the math yourself. However, understanding how the credit works helps you know whether the amount shown is reasonable for your situation.

You claim the EITC on Form 1040 (your main tax return form) by filling in Schedule EIC if you have may have access to children, or by entering the credit amount directly if you have no children. The form asks for information about each may have access to child, such as their Social Security number and relationship to you.

Differences between the federal EITC and state credits

Some states offer their own earned income tax credit on top of the federal credit. These state credits are separate from the federal EITC and have their own rules, maximum amounts, and income limits. A few states do not have an income tax at all, so they offer no state EITC. Others offer a credit that is a percentage of the federal credit — for example, 20 percent of what you receive federally.

If you live in a state with an EITC, you claim it on your state tax return, not your federal return. Your tax software or preparer will handle both if you use one. If you file by hand, you need to check your state's tax instructions to see whether a state EITC is available and how to claim it.

What happens if your credit is larger than your tax bill

One of the most valuable features of the EITC is that it is refundable. This means if your credit is larger than the amount of federal income tax you owe, the IRS sends you the difference as a refund. For example, if you owe $500 in federal income tax but your EITC is $2,000, you receive a $1,500 refund.

Not all tax credits work this way. Some credits can only reduce your tax bill to zero; any amount above that is lost. The EITC is different — you get the full amount you are due, even if it means the IRS owes you money.

Frequently Asked Questions

Can I get the EITC if I have no children?

Yes. Workers with no may have access to children can receive up to $560 for the 2023 tax year, though the income limits are much lower than for workers with children. You must be between ages 25 and 64, have earned income, and meet the income threshold for your filing status.

Does the EITC change every year?

Yes. The IRS adjusts the maximum credit amounts and income limits each year for inflation. The percentages used to calculate the credit (the phase-in and phase-out rates) stay the same, but the dollar amounts change. Always check the current year's IRS tables or Form 1040 instructions for the amounts that explore to your return.

What if I earned money from self-employment and a job in the same year?

You add your wages from your job and your net self-employment income together to find your total earned income for EITC purposes. Both types of income count toward the credit calculation and the income limits.

If I get the EITC one year, can I get it again the next year?

Yes, if you meet the requirements again. The EITC is not a one-time credit. You can claim it every year you have earned income and meet the other rules. Your income and family situation may change from year to year, so your credit amount may be different each time.