The EITC is a tax credit that puts money back in your pocket if you earn a low to moderate income

The Earned Income Tax Credit (EITC) is a refundable tax credit for people who work but earn less than a certain amount. Unlike a deduction, which reduces the income you pay tax on, a credit reduces the tax you owe dollar for dollar. If the EITC is larger than the tax you owe, the IRS sends you the difference as a refund — even if you owe zero tax.

The credit is designed to reward work and reduce the tax burden on lower-earning households. You claim it when you file your federal tax return, either on your own or with help from a tax preparer. The amount you receive depends on your income, filing status, and whether you have may have access to children.

Key Takeaways

  • The EITC is a refundable credit, meaning you can receive money back even if you owe no tax.
  • Your income must fall below a set limit that varies by filing status and number of may have access to children.
  • You claim the EITC on your federal tax return using IRS Form 1040 and Schedule EIC (or Form 8812 if you have three or more may have access to children).
  • The credit amount ranges from a few hundred dollars to several thousand dollars depending on your situation.
  • You do not have to owe federal income tax to receive the EITC, but you must have earned income from work.

Income limits and credit amounts vary by family size

The IRS sets income thresholds that change each year. For the 2023 tax year, the maximum income to claim the EITC ranged from about $16,000 for a single filer with no children to about $56,000 for a married couple filing jointly with three or more may have access to children. These numbers shift annually based on inflation.

The credit amount also depends on how many may have access to children you have. A single person with no children can receive up to a few hundred dollars. A parent with one may have access to child can receive significantly more — typically $1,000 to $2,000. The credit grows larger with each additional child, up to a maximum of three may have access to children for tax purposes.

Your income must come from work — wages, salary, self-employment income, or farm income all count. Investment income, unemployment benefits, and Social Security do not count as earned income for the EITC.

Who can claim the EITC

You must be a U.S. citizen or resident alien, have a valid Social Security number, and have earned income from work during the tax year. Your filing status matters: you can file as single, married filing jointly, head of household, or may have access to widow(er). Married filing separately filers cannot claim the EITC.

If you have children, they must meet specific requirements to count as "may have access to children." They must be your biological child, stepchild, foster child, or sibling (or descendant of a sibling). They must be under age 17 at the end of the tax year, live with you for more than half the year, and have a valid Social Security number. They cannot be claimed as a dependent by anyone else.

You can claim the EITC even if you have no children, but your income limit is lower and the credit amount is smaller. Some states also offer their own earned income tax credits on top of the federal one.

How to claim the EITC on your tax return

You claim the EITC when you file your federal income tax return. If you have no may have access to children, you use IRS Form 1040 and Schedule EIC. If you have one or two may have access to children, you also use Schedule EIC. If you have three or more may have access to children, you use Form 8812 instead of Schedule EIC.

You will need your Social Security number, your children's Social Security numbers (if claiming with children), your income information from W-2s or 1099s, and proof of residency if requested. The IRS may ask for documentation like birth certificates or school records to verify that your children meet the requirements.

You can file your return yourself using tax software, work with a tax preparer, or use free tax preparation services. The IRS Free File program offers free federal return preparation and filing to people who earn below a certain income threshold. Many community organizations and libraries also offer free tax help during filing season.

The EITC can be claimed as a refund or advance payment

Most people claim the EITC when they file their annual tax return and receive the credit as part of their refund. However, if you have a may have access to child, you may be able to receive part of the credit in advance payments throughout the year instead of waiting until tax time.

The IRS calls this the Advanced Child Tax Credit, which is related to but separate from the EITC itself. If you choose to receive advance payments, the amount you get upfront reduces the credit you claim on your tax return. Some people prefer to wait and claim the full amount at once; others prefer the smaller monthly payments to help with cash flow.

What happens after you claim the EITC

After you file your return, the IRS processes it and either sends you a refund or applies the credit to any taxes you owe. If the EITC is larger than your tax liability, you receive the excess as a refund by direct deposit, check, or prepaid debit card — whichever method you chose on your return.

The IRS may verify your information by requesting documents like birth certificates, proof of residency, or income statements. This verification process can take several weeks or months. If the IRS finds an error or determines you do not meet the requirements, it will reduce or deny your credit and explain why in a letter.

If you received an incorrect amount, the IRS will contact you. You have the right to respond and provide additional documentation if you believe the decision is wrong.

State earned income tax credits may add to your federal credit

Twenty-nine states and Washington, D.C. offer their own earned income tax credits on top of the federal EITC. Some state credits are a percentage of the federal credit — for example, 20 percent of what you receive federally. Others have their own income limits and credit amounts.

You claim state credits on your state tax return, not your federal return. If your state offers an EITC, the state tax agency will provide the form and instructions. Many tax software programs calculate both federal and state credits automatically if you provide your income information.

Frequently Asked Questions

Do I have to owe taxes to get the EITC?

No. The EITC is refundable, which means you can receive money even if you owe zero federal income tax. You must have earned income from work, but you do not have to owe any tax to claim the credit.

What if I made a mistake on my EITC claim?

Contact the IRS or work with a tax professional to file an amended return using Form 1040-X. You have three years from the original due date to claim a credit you missed or correct an error. If the IRS made the error, it will contact you with an explanation and next steps.

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

Yes. Self-employment income counts as earned income for the EITC. You will need to report your net profit from Schedule C (or Schedule F if you are a farmer) on your Form 1040. The same income limits and credit amounts explore.

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

Your child must have a valid Social Security number to be claimed as a may have access to child for the EITC. If your child does not have one, you can explore through the Social Security Administration before filing your tax return.

Can I claim the EITC if I am not a U.S. citizen?

You must be a U.S. citizen or resident alien with a valid Social Security number to claim the EITC. If you are not a citizen, you may still file a tax return and claim other credits you are may have access to to, but you cannot claim the EITC.