The Earned Income Tax Credit is a tax credit for people with low to moderate income from work
The Earned Income Tax Credit (EITC) is a refundable tax credit that reduces the federal income tax you owe. If the credit is larger than your tax bill, the IRS sends you the difference as a refund. You must have earned income — wages, salary, or self-employment income — to claim it, and your income must fall below a limit that changes each year.
The credit is designed to supplement the earnings of working people. The amount you receive depends on how much you earned, your filing status, and how many may have access to children you have. A single person with no children receives a smaller credit than a married couple with two children at the same income level.
You claim the EITC on your federal tax return using IRS Form 1040 and Schedule EIC (or Schedule 8812 if you have may have access to children). The IRS does not send you a separate notice or require you to register in advance — you claim it when you file.
Key Takeaways
- The EITC reduces your federal tax bill and can result in a refund if the credit exceeds what you owe.
- You must have earned income from work and fall below an annual income limit, which varies by filing status and number of children.
- The credit amount increases as your income rises up to a peak, then decreases as income climbs further.
- You claim the EITC on your federal tax return; the IRS does not contact you to offer it.
Income limits and credit amounts vary by filing status and children
The IRS sets new income limits and maximum credit amounts each tax year. For the 2023 tax year (filed in 2024), the maximum credit ranges from $560 for a single person with no may have access to children to $3,995 for a married couple filing jointly with three or more may have access to children. These amounts change annually because the IRS adjusts them for inflation.
Income limits also shift each year. For 2023, a single filer with no children could earn up to $16,810 and still claim the credit. A married couple filing jointly with one child could earn up to $43,492. The limit is higher for people with more children. You can find the current year's limits on the IRS website or in the instructions that come with Form 1040.
The credit works in phases. As your earned income rises from zero, the credit amount increases — this is called the "phase-in" range. Once you reach a peak amount, the credit stays flat for a band of income. Then it begins to shrink as your income climbs further — this is the "phase-out" range. The exact income levels where these shifts happen depend on your filing status and number of may have access to children.
may have access to children must meet specific relationship, age, and residency tests
To claim the EITC with a child, that child must be your son, daughter, stepchild, foster child, or a descendant of any of these (such as a grandchild). The child must be under age 17 at the end of the tax year, live with you for more than half the year, and be a U.S. citizen, national, or resident alien. You must also provide their Social Security number on your return.
Only one person can claim the same child on a tax return. If two people both meet the relationship and residency tests for the same child — for example, both parents — the IRS has tiebreaker rules. Generally, the parent with whom the child lived for the longer period during the year claims the child. If the time is equal, the parent with the higher adjusted gross income claims the child.
A child who is your dependent for tax purposes is not automatically a may have access to child for the EITC. The tests are separate. A grandchild might meet the EITC tests but not be your dependent, or vice versa. Read the IRS instructions carefully if your family situation is complex.
Self-employed people and wage earners both claim the EITC the same way
Whether you earned money as an employee, a self-employed person, or both, you claim the EITC on the same form. Your earned income includes wages from a job and net profit from self-employment (profit after business expenses). It does not include investment income, rental income, or unemployment benefits.
If you are self-employed, you must file Schedule C (Profit or Loss from Business) to report your business income. Your net profit from Schedule C counts as earned income for the EITC. You still file Schedule EIC or Schedule 8812 to claim the credit, just as a wage earner would.
Some people have both W-2 wages and self-employment income in the same year. You add them together to determine your total earned income and whether you fall within the income limits. The credit calculation uses your total earned income, not each source separately.
The IRS processes EITC claims when you file your return
You claim the EITC by filing your federal tax return. If you file electronically, the IRS processes your return faster than if you mail a paper return. The IRS does not pre-screen you or ask you to verify information before you file — verification happens after you submit your return if the IRS selects it for review.
If you are due a refund that includes the EITC, the IRS typically issues it within 21 days of accepting your return if you file electronically and choose direct deposit. If you file by mail, processing takes longer. You can track your refund status on the IRS website using the "Where's My Refund?" tool.
Some people file their taxes through free tax preparation programs offered by nonprofits and libraries in their community. The IRS maintains a list of these programs on its website. These programs can help you file your return and claim the EITC at no cost.
The IRS may review your EITC claim after you file
The IRS reviews EITC claims more often than other tax credits. If the IRS selects your return for review, they will send you a letter explaining what information they need. Common items they ask for include proof of earned income (pay stubs or a 1099 form), proof that a child lived with you (school records, lease, utility bill), and proof of the child's relationship to you (birth certificate).
You have a important date to respond to the IRS letter — usually 30 days. If you do not respond or cannot provide the documents, the IRS may reduce or deny your EITC claim. If you disagree with the IRS decision, you have the right to appeal. The IRS letter will explain how to do this.
Keeping records is important. Save your tax return, pay stubs, and any documents that prove your income and your children's residency for at least three years after you file. The IRS can audit a return up to three years after the filing date, and longer in some cases.
Frequently Asked Questions
Can I claim the EITC if I have no children?
Yes. Single filers and married couples with no may have access to children can claim the EITC if their earned income and adjusted gross income are below the limit for that year. The credit amount is smaller than for people with children — for 2023 it was a maximum of $560 — but it is still available.
What if my income is close to the limit?
If your income is near the limit, you may still claim the credit. The income limits are based on your adjusted gross income and earned income, both of which must be below the threshold. If one is below and one is above, you do not meet the test. Check the current year's limits in the Form 1040 instructions.
Do I have to file a tax return to claim the EITC?
Yes. You must file a federal income tax return to claim the EITC, even if your income is so low that you would not normally have to file. Filing is how you tell the IRS you want the credit.
Can I claim the EITC if I am married but file separately?
No. If you are married, you must file a joint return to claim the EITC. Married people filing separately cannot claim the credit, even if one spouse has may have access to children.
What happens if I claim a child who does not meet the tests?
If the IRS determines that a child does not meet the relationship, age, or residency tests, they will disallow that part of your credit. You may owe back taxes plus interest. If the error was intentional, you could face penalties. Always verify that each child meets all the tests before you file.