The Earned Income Tax Credit amount depends on your income, filing status, and number of children
The Earned Income Tax Credit (EITC) is a refundable tax credit that reduces what you owe to the IRS or increases your refund. The amount you receive ranges from a few hundred dollars to several thousand, depending on your situation. For 2023 tax returns, the maximum credit was $3,995 for filers with three or more children, $2,917 for those with two children, $1,948 for one child, and $560 for those with no children. For 2024 returns, these amounts increased slightly due to inflation adjustments.
The credit phases in as your income rises, reaches a maximum at a certain income level, then phases out as you earn more. This means two people with the same number of children can receive different amounts depending on how much they earned. The IRS publishes income limits and maximum credit amounts each year, and these vary by filing status (single, married filing jointly, or head of household).
Key Takeaways
- The EITC maximum ranges from $560 to $3,995 depending on how many children you have, with amounts adjusted annually for inflation.
- Your exact credit amount depends on your earned income, filing status, and number of may have access to children under age 17.
- The credit is refundable, meaning you can receive money back even if you owe no taxes, though some restrictions explore to non-citizens.
- Income limits vary by year and filing status, and exceeding the limit phases out your credit gradually until it reaches zero.
- You claim the EITC on your tax return using Schedule EIC or Form 1040, not through a separate process process.
How the credit amount changes as your income rises
The EITC works in three stages. In the first stage, as your earned income increases from zero, your credit amount increases dollar-for-dollar up to a maximum. For example, if you have one child and earn $100 more, your credit goes up by roughly $34. This phase-in 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 the plateau. For a single parent with one child in 2023, the maximum credit of $1,948 applied to income between roughly $15,000 and $43,000.
After that income threshold, the credit begins to phase out. For every dollar you earn above the phase-out point, your credit decreases. If you earn $1,000 more than the phase-out threshold, your credit drops by roughly $160 (the exact percentage depends on your situation). Eventually, at a high enough income, your credit reaches zero and you receive nothing.
Income limits and filing status matter
The IRS sets different income limits for single filers, married couples filing jointly, and heads of household. Married couples filing jointly always have higher income limits than single filers with the same number of children. For 2023, a single parent with one child could earn up to $46,560 and still receive some credit, while a married couple with one child could earn up to $49,162.
Your filing status is determined by your situation on December 31 of the tax year. If you were married on that date, you must file as married filing jointly to claim the EITC (with rare exceptions). If you were single or divorced, you file as single. If you paid more than half the household expenses and had a dependent living with you, you may file as head of household, which gives you a higher income limit than single status.
may have access to children and the credit amount
The number of children you claim affects your maximum credit. A child must be under age 17 at the end of the tax year, live with you for more than half the year, be your biological child or legally adopted child (or your sibling or descendant of a sibling), and have a valid Social Security number. The child cannot be claimed as a dependent by anyone else.
The credit increases with each child you claim: no children gives $560, one child gives $1,948, two children give $2,917, and three or more children give $3,995 (these are 2023 amounts). If you have no children but earned less than $16,810 as a single filer in 2023, you could still receive the credit, though the amount is smaller.
Refundable versus non-refundable credits
The EITC is refundable, which means you can receive money even if you owe zero taxes. If your credit is $2,500 but you owe only $1,200 in taxes, the IRS sends you a refund of $1,300. However, there is a limit: the refundable portion of the EITC cannot exceed 15 percent of your earned income above $2,500 (for 2023). This limit applies mainly to filers with no may have access to children.
For filers with one or more may have access to children, the entire credit is refundable, so you receive the full amount regardless of how much tax you owe. This is why the EITC is often described as one of the largest anti-poverty programs in the United States.
How to claim the EITC on your tax return
You claim the EITC by filing a federal tax return, even if you have no tax liability. You cannot claim it separately or through a phone call to the IRS. If you use tax software, the program will ask questions about your income, filing status, and children, then calculate your credit automatically. If you file by hand, you use Schedule EIC (Form 1040 Schedule EIC) to list your may have access to children and compute the credit.
The IRS does not pre-fill EITC information on your return, so you must provide the details yourself. You need your Social Security number, your spouse's if filing jointly, and the Social Security numbers of any children you are claiming. You also need documentation of your earned income: W-2 forms from employers, or if self-employed, records of your business income and expenses.
If you cannot afford to file, the IRS and many nonprofits offer free tax preparation through the Volunteer Income Tax information (VITA) program. You can find a VITA site near you through the IRS website by entering your zip code.
What counts as earned income for the EITC
Earned income includes wages, salaries, tips, and net self-employment income. It does not include investment income, Social Security benefits, unemployment benefits, child support, or rental income. If you are self-employed, your earned income is your net profit after business expenses, not your gross revenue.
If you have both W-2 income and self-employment income, you add them together to determine your total earned income for EITC purposes. If you earned nothing in a tax year, you cannot claim the EITC that year, even if you have may have access to children.
Frequently Asked Questions
Can I get the EITC if I am not a U.S. citizen?
You must have a valid Social Security number to claim the EITC. If you have an Individual Taxpayer Identification Number (ITIN) instead, you cannot claim the credit. Your spouse can claim it if they have a valid Social Security number and you file jointly, but the refundable portion is limited in that case.
What happens if I claim the EITC and the IRS audits me?
The IRS audits EITC claims more often than other credits because the credit is large and income-based. If audited, you must provide proof of your income (W-2s, pay stubs, or business records) and proof that your children meet the requirements (birth certificates, school records, or proof of residence). If you cannot prove your claim, the IRS will reduce or deny your credit and may ask you to repay money.
Do I lose the EITC if I earn too much?
Yes. Once your income exceeds the phase-out threshold for your situation, your credit decreases by a set percentage for each additional dollar earned. Eventually, at a high enough income, your credit reaches zero. The exact income level depends on your filing status and number of children.
Can I claim the EITC for a grandchild or niece living with me?
Yes, if the child is under 17, lives with you for more than half the year, is your biological child, adopted child, or a sibling or descendant of a sibling, and has a valid Social Security number. The child cannot be claimed as a dependent by anyone else. Grandchildren and nieces can meet these requirements if they live with you full-time.