The Earned Income Tax Credit is for people who work but earn below a certain income threshold

The Earned Income Tax Credit (EITC) is a federal tax benefit that reduces the amount of tax you owe, or increases your refund, if you work and earn below a set income limit. You do not have to be poor to receive it — the income cutoff depends on how many dependents you claim and your filing status. The IRS administers it, and you claim it when you file your tax return.

The key difference between the EITC and other tax deductions is that it can result in a refund larger than the taxes you paid in. If you owe $500 in taxes but the EITC is worth $1,200, you receive a $700 refund. This makes it one of the largest tax benefits available to working people with lower incomes.

Key Takeaways

  • You must have earned income from work — self-employment, wages, or tips all count, but investment income does not.
  • Your income must fall below the IRS limit for your filing status and number of dependents, which changes each year.
  • You must be a U.S. citizen or resident alien with a valid Social Security number.
  • You claim the EITC on your tax return using Form 1040 and Schedule EIC, or through tax software that walks you through the questions.
  • If you have a child, you may also be able to claim the Child Tax Credit in addition to the EITC.

Income limits vary by filing status and number of dependents

The IRS sets a maximum income you can earn and still receive the EITC. This limit changes every year because it is adjusted for inflation. For the 2023 tax year (filed in 2024), the limits ranged from about $16,000 for a single filer with no dependents to about $56,000 for a married couple filing jointly with three or more dependents. The 2024 limits are higher, but you will need to check the IRS website or your tax software for the exact numbers when you file.

Your filing status matters — married filing jointly has a higher limit than single or head of household. The number of dependents you claim also raises the limit. Someone with one child can earn more than someone with no children and still receive the credit. If your income is close to the limit, calculate it carefully or use tax software that does the math for you.

You must have earned income from work

The EITC only counts income you earned by working. This includes wages from a job, tips, net profit from self-employment, and certain disability payments if you were receiving them before you reached full retirement age. It does not include investment income, rental income, unemployment benefits, Social Security, or money from a pension.

If you are self-employed, your net profit (what you earned minus business expenses) counts as earned income. You will need to report it on Schedule C when you file. If you have both a job and self-employment income, both count toward the EITC calculation.

Citizenship and Social Security number requirements

You must be a U.S. citizen or resident alien to claim the EITC. The IRS requires a valid Social Security number for you, your spouse if you file jointly, and any dependents you claim. If you do not have a Social Security number, you cannot claim the credit, even if you work and meet all other requirements.

If you are married filing jointly, both spouses must have valid Social Security numbers. If you have dependents, each one must have a number as well. The IRS cross-checks these numbers against Social Security Administration records, so they must be correct and match your name exactly as it appears on your tax return.

How the credit amount is calculated

The EITC is not a flat amount — it increases as your earned income rises, up to a maximum, then decreases as your income goes higher. For someone with no dependents, the credit is smaller than for someone with children. The IRS publishes tax tables and worksheets each year that show the credit amount for different income levels and filing statuses.

You do not calculate this yourself if you use tax software or file with a tax professional — the software or preparer enters your income and dependent information, and the system calculates the credit automatically. If you file by hand using Form 1040 and Schedule EIC, you use the IRS worksheet or table to find your credit amount based on your earned income and filing status.

How to claim the EITC on your tax return

You claim the EITC by filing a federal tax return, even if you do not normally have to file. You will use Form 1040 (the main individual income tax form) and Schedule EIC (the EITC worksheet). If you use tax software like TurboTax, H&R Block, or TaxAct, the software asks you questions about your income and dependents and automatically fills in the forms for you.

If you have a child, you will also need to provide their Social Security number, date of birth, and relationship to you. The IRS uses this information to verify that the child is your dependent and that you are not claiming the same child on multiple returns. If you file electronically, the return is checked for errors before it is submitted, which can catch problems with dependent information.

You can file for free through the IRS Free File program if your income is below a certain threshold, or you can use a paid tax software or hire a tax preparer. Some community organizations and libraries also offer free tax preparation help during tax season.

What happens if you have a child dependent

If you have a may have access to child, the EITC amount is much larger than if you have no dependents. A may have access to child must be under age 17 at the end of the tax year, have a valid Social Security number, be a U.S. citizen or resident alien, and live with you for more than half the year. The child must also be your son, daughter, stepchild, foster child, sibling, or descendant of any of these.

You may also be able to claim the Child Tax Credit in addition to the EITC. The Child Tax Credit is a separate benefit that reduces your tax bill by up to $2,000 per child under 17. You can claim both credits on the same return if you meet the requirements for each one. Tax software will ask about your dependents and calculate both credits for you.

Frequently Asked Questions

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

Yes. Your net self-employment income (earnings minus business expenses) counts as earned income for the EITC. You will report it on Schedule C and then claim the EITC on your Form 1040 and Schedule EIC, just as a wage earner would. Self-employed people must also pay self-employment tax, which is separate from the EITC.

What if I earned income but did not have taxes withheld from my paycheck?

You can still claim the EITC. The credit is based on your earned income, not on how much tax was withheld. If you owe no tax but the EITC is worth more than zero, you receive the difference as a refund. This is one reason people with low incomes should file a return even if they have no tax liability.

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

No. If you are married, you must file jointly to claim the EITC. Married filing separately returns do not may have access to. This is one of the few tax benefits that requires joint filing.

What if my income is slightly above the limit?

If your income exceeds the limit for your filing status and number of dependents, you do not receive the EITC. There is no partial credit — you either meet the income requirement or you do not. However, the limits change each year, so check the current year's limits when you file.

Do I need to report the EITC when I file state taxes?

The EITC is a federal tax credit only. Some states have their own earned income tax credits, but they are separate programs with their own rules and income limits. Check your state tax agency's website to see if your state offers an EITC and whether you meet its requirements.