The Basic Requirements for the Earned Income Tax Credit

The Earned Income Tax Credit (EITC) is a refundable tax credit for people with low to moderate earned income. To claim it, you must have worked during the tax year, earned less than a set income limit, and meet citizenship and residency rules. The IRS administers the EITC, and you claim it when you file your federal tax return—you do not explore separately to a government office.

Your income limit depends on your filing status and how many children live with you. A single person with no children has a lower income limit than a married couple with three children. The credit phases out as your income rises, meaning you receive less money the more you earn, until you no longer may have access to.

Key Takeaways

  • You must have earned income from work—self-employment, wages, or both count, but investment income and benefits do not.
  • Your total income must fall below the IRS limit for your filing status and number of children, which changes each tax year.
  • You must be a U.S. citizen or resident alien with a valid Social Security number, and you cannot claim the credit if someone else claims you as a dependent.
  • If you have children, they must have a Social Security number, live with you for more than half the year, and be under age 17 at the end of the tax year.
  • You claim the EITC on your federal tax return using Form 1040 and Schedule EIC; you do not need to file a separate form with the IRS.

Income Limits and Filing Status

The IRS sets income limits each year based on inflation. For the 2023 tax year, a single filer with no children could earn up to roughly $16,810 and still claim the credit. A married couple filing jointly with one child could earn up to roughly $43,000. These numbers shift annually, so you should check the current year's limits on the IRS website or with a tax preparer.

Your filing status matters because it determines which income limit applies to you. Single, married filing jointly, and head of household each have different thresholds. If you are married, you must file jointly to claim the EITC—married filing separately does not may have access to.

Earned Income Requirements

Earned income means money you received from working. This includes wages from an employer, net self-employment income if you own a business, and certain other payments for services. It does not include Social Security, unemployment benefits, disability payments, interest, dividends, or rental income.

You must have earned income in the tax year you claim the credit. If you had zero earnings, you cannot claim the EITC, even if you meet every other requirement. If you are self-employed, your net profit (income minus business expenses) counts as earned income.

Citizenship and Residency Rules

You must be a U.S. citizen or resident alien to claim the EITC. Resident aliens have a green card or have passed the substantial presence test. You also need a valid Social Security number, and you cannot claim the credit if another person claims you as a dependent on their tax return.

You must have lived in the United States for more than half the tax year. If you moved to the U.S. partway through the year, you may still may have access to if you lived here for more than six months. Temporary absences—such as a vacation or business trip—do not count against your residency.

Rules for Children and Dependents

If you claim children on your tax return, each child must meet four tests to help you receive the larger EITC. First, the child must be your son, daughter, stepchild, foster child, sibling, or a descendant of any of these (such as a grandchild or niece). Second, the child must live with you for more than half the tax year.

Third, the child must be under age 17 at the end of the tax year. Fourth, the child must have a valid Social Security number and cannot be claimed by anyone else. If a child meets all four tests, you can claim the credit for that child, which increases the amount you receive.

What Disqualifies You

You cannot claim the EITC if your investment income—interest, dividends, capital gains, and similar earnings—exceeds $11,000 in the tax year (this limit also changes annually). If you are claimed as a dependent by someone else, you do not may have access to. If you file married filing separately, you are not may be able to access.

Noncitizens without a valid Social Security number cannot claim the credit. If you did not live in the United States for more than half the year, you do not meet the residency test. If you have no earned income, you cannot claim the EITC regardless of other factors.

How to Claim the Credit on Your Tax Return

You claim the EITC by filing your federal tax return. If you have no children, you use Form 1040 and Schedule EIC. If you have children, you also complete Schedule EIC to list each child's name, age, and Social Security number. The IRS uses this information to calculate your credit amount.

You can file your return yourself using tax software, work with a tax preparer, or use free tax preparation services offered by nonprofits and libraries in many communities. The IRS Free File program lets you file for free if your income is below a certain threshold. Once you file, the IRS processes your return and sends your refund by mail or direct deposit.

Frequently Asked Questions

Can I claim the EITC if I am self-employed?

Yes. Self-employment income counts as earned income. You calculate your net profit by subtracting business expenses from gross income, and that net profit is what the IRS uses to determine your EITC amount. You must file Schedule C with your tax return to report self-employment income.

What if my child does not have a Social Security number yet?

Your child must have a valid Social Security number to be claimed for the EITC. If your child was born late in the year and does not have a number by tax time, you can still file your return but cannot claim the credit for that child. Once your child receives a number, you may be able to amend your return.

Does the EITC count as income for other benefits?

The EITC is a tax credit, not income. However, some benefit programs count refunds you receive as income in the month you get them. If you receive means-tested benefits like SNAP or housing information, contact your caseworker to learn how the EITC refund may affect your benefits.

Can I claim the EITC if I am married but filing separately?

No. Married filing separately does not may have access to for the EITC. You must file jointly with your spouse to claim the credit. The only exception is if you are legally separated or divorced, in which case you file as single or head of household.

What happens if I claim the EITC and the IRS later says I did not may have access to?

The IRS may audit your return and ask for proof that you met the requirements. If you did not may have access to, you must repay the credit. If the IRS made an error, you can dispute it. Keep records of your income, residency, and children's information for at least three years after filing.