How the Earned Income Tax Credit Sets Its Income Limits
The Earned Income Tax Credit (EITC) uses income thresholds that change each year based on inflation. For 2024, the maximum income you can earn and still be considered for the credit depends on your filing status and how many children you claim. If you earn more than the limit for your situation, you cannot receive the credit that year.
The IRS publishes new income limits every January. These limits explore to the income you report on your tax return, which includes wages, self-employment income, and certain other earnings. The limit is not based on what you think you should earn or what you need to live on — it is a fixed number tied to your filing status and dependent children.
Key Takeaways
- For 2024, the income limit ranges from $16,810 for a single filer with no children to $63,398 for a married couple filing jointly with three or more children.
- Your income limit depends on whether you file as single, head of household, or married filing jointly, and on the number of may have access to children you claim.
- The IRS counts wages, self-employment income, and certain investment income toward your total — not just your paycheck.
- Income limits increase slightly each year to account for inflation, so the 2025 limits will be higher than 2024.
Income Limits by Filing Status and Number of Children (2024)
The credit phases out as your income rises, meaning you can earn somewhat above the limit and still receive a reduced credit. The table below shows the maximum income at which the credit completely ends for each situation.
| Filing Status | No Children | One Child | Two Children | Three or More Children |
|---|---|---|---|---|
| Single or Head of Household | $16,810 | $43,492 | $49,399 | $52,918 |
| Married Filing Jointly | $23,632 | $49,162 | $55,069 | $58,588 |
These numbers represent the income ceiling — the point where the credit reaches zero. If your income is below these amounts, you may be may have access to to the credit. If your income exceeds these amounts, you will not receive the credit for that tax year, even if you meet all other requirements.
Head of household filers use the same limits as single filers. Married couples filing separately cannot claim the EITC at all, regardless of income.
What Income Counts Toward Your Limit
The IRS counts earned income — money you receive for work — plus certain other income sources. Your W-2 wages from an employer count. So does net self-employment income if you run your own business. Rental income, capital gains, and interest from savings accounts also count toward your total income for EITC purposes.
Some income does not count. Supplemental Security Income (SSI), Social Security benefits, unemployment benefits, and workers' compensation do not add to your income total for the credit. Neither do child support payments you receive or certain disability payments. If you are unsure whether a specific income source counts, the IRS website lists all forms of income that factor into the calculation.
You report your total income on your tax return. The IRS uses the "modified adjusted gross income" (MAGI) from your return to determine whether you fall within the limit. This is usually the same as your adjusted gross income (AGI), which appears on your 1040 form.
How Income Limits Change Year to Year
The IRS adjusts income limits annually in January to reflect inflation. The 2024 limits are higher than 2023, and the 2025 limits (released in January 2025) will be higher still. This means a household that earned too much to may have access to in one year might may have access to the next year if their income stays the same, straightforward because the limit has risen.
You can find the current year's limits on the IRS website under "EITC Income Limits" or in the instructions that come with Form 1040. If you are preparing your taxes, check the year-specific limits for the tax year you are filing, not the current calendar year. For example, when you file your 2024 taxes in early 2025, you use the 2024 income limits, not the 2025 limits.
What Happens If Your Income Is Close to the Limit
The EITC does not disappear the moment you cross the income threshold. Instead, it phases out — it shrinks gradually as your income rises above a certain point. This means you can earn somewhat more than the phase-out income and still receive a smaller credit.
For example, a single parent with one child in 2024 begins to lose the credit once their income exceeds $40,162. They can continue to receive a reduced credit until their income reaches $43,492, at which point the credit becomes zero. The exact amount of the reduction depends on how far above the phase-out point your income falls.
Because of this phase-out, it is worth calculating whether you might still may have access to even if your income seems close to the limit. A tax professional or the IRS Free File program can help you determine your exact credit amount based on your actual income.
Income Limits for Self-Employed and Gig Workers
If you are self-employed or earn income through gig work (driving for a rideshare company, freelancing, selling items online), your income limit works the same way as for W-2 employees. You count your net self-employment income — the amount you earn after subtracting business expenses — toward your total income.
Self-employed filers must file Schedule C (Profit or Loss from Business) along with their 1040 to report this income. The net profit from Schedule C is what counts toward your EITC income limit, not your gross revenue. If you have a loss in your business, that loss can reduce your total income and may help you stay within the limit.
Keep careful records of your business expenses — supplies, equipment, mileage, and other costs directly tied to earning your income. These reduce your net income figure and can make the difference between may have access to and not may have access to for the credit.
Frequently Asked Questions
What if my income goes over the limit partway through the year?
You report your total income for the entire year on your tax return. If your annual income exceeds the limit, you do not receive the credit for that year, even if you earned less in some months. However, if you expect your income to stay below the limit for the full year, you can claim the credit when you file.
Do I need to report the EITC to my employer?
No. The EITC is claimed on your tax return, not through your employer. You do not need to tell your employer you are receiving it. Some people choose to claim the credit in advance through their paycheck using Form W-5, but this is optional and less common.
If I am married, do both spouses' incomes count toward the limit?
Yes. If you file as married filing jointly, the IRS adds both spouses' incomes together and compares the total to the married filing jointly income limit. You cannot split your income between two separate returns to stay under the single filer limit.
Can I claim the EITC if I have investment income?
Yes, but only if your investment income is below $11,000 for 2024. If your interest, dividends, capital gains, or other investment income exceeds this amount, you cannot claim the EITC that year, regardless of your earned income.
What if I am not sure whether my income is under the limit?
Calculate your total income using your pay stubs, 1099 forms, and any other income documents you receive. Compare it to the limit for your filing status and number of children. If you are within a few hundred dollars of the limit, consider using the IRS Free File program or consulting a tax professional to confirm your exact income and credit amount.