The Earned Income Tax Credit is for working people with low to moderate income
The Earned Income Tax Credit (EITC) is a federal tax credit that reduces the amount of tax you owe, or increases your refund, if you work and earn below certain income limits. You do not have to own a home, have children, or meet any requirement beyond working and staying within the income range for your situation. The credit is designed to help working people keep more of what they earn.
The amount you receive depends on three things: how much you earned, whether you have children, and your filing status. A single person with no children can receive up to a few hundred dollars. A married couple or single parent with three children can receive several thousand dollars. The IRS calculates the exact amount based on your tax return.
Key Takeaways
- You must have earned income from work — wages, self-employment, or certain other sources — to receive the EITC.
- Your income must fall below a specific limit that changes each year and depends on your filing status and number of children.
- You claim the EITC by filing a federal tax return, even if you would not normally be required to file.
- The credit can reduce your tax bill to zero and result in a refund, meaning you receive money back from the IRS.
- You can receive part of the credit in advance during the year if you register with your employer, though most people receive it when they file.
Income limits vary by filing status and number of children
The IRS sets income limits each year, and they are higher if you have children. For 2024, a single person with no children can earn up to roughly $17,000 and still receive some credit. A single parent with one child can earn up to roughly $46,000. A married couple filing jointly with two children can earn up to roughly $56,000. These numbers change annually, so check the IRS website or a tax software for the current year's limits.
Your income includes wages from a job, net profit from self-employment, and certain other sources like disability payments or taxable scholarships. It does not include child support you receive, Social Security benefits, or unemployment benefits. If you are self-employed, you calculate your net earnings after business expenses.
If your income is above the limit for your situation, you do not receive the credit. There is no partial credit if you are slightly over — the credit phases out completely once you exceed the maximum.
You must have earned income and a valid Social Security number
To receive the EITC, you must have earned income from work during the year. This means wages from an employer, net profit from self-employment, or certain other earned income sources. Investment income, rental income, and passive business income do not count as earned income for EITC purposes.
You also need a valid Social Security number (SSN) for yourself and for any children you claim. If you are married filing jointly, your spouse needs an SSN as well. If you do not have an SSN, you cannot receive the credit.
You must be a U.S. citizen or resident alien for the entire tax year. If you are not, you may still file a tax return using an Individual Taxpayer Identification Number (ITIN), but you would not be able to claim the EITC.
Filing status and dependent children affect the credit amount
The EITC is larger if you have children. The IRS defines a may have access to child as someone under age 17 at the end of the tax year, related to you by blood or adoption, living with you for more than half the year, and claimed as your dependent on your tax return. A grandchild, niece, nephew, or sibling can count if they meet these conditions.
Your filing status also matters. Single filers, heads of household, and married couples filing jointly all have different income limits and credit amounts. Married people filing separately do not receive the EITC. If you are unmarried and have a child, you typically file as head of household, which gives you a higher income limit than single status.
If you have multiple children, the credit increases with each one, up to a maximum. The exact amounts change yearly, so the IRS publishes updated tables each tax season.
You claim the EITC by filing a federal tax return
To receive the EITC, you must file a federal income tax return. You file using Form 1040 and Schedule EIC (or the equivalent form in your tax software). Even if you earned very little and would not normally be required to file, you should file to claim the credit — it often results in a refund.
You can file on your own using free tax software, through a tax professional, or by mailing a paper return to the IRS. The IRS Free File program offers free tax software to people earning below a certain threshold. Many community organizations and libraries also offer free tax preparation help.
You must file by the tax important date — usually April 15 — to receive the credit for that year. If you miss the important date, you can still file a late return and claim the credit, but you should do so as soon as possible.
The advance EITC option lets you receive part of the credit during the year
Instead of waiting until you file your tax return to receive the full credit, you can register with your employer to receive part of it in your paycheck throughout the year. This is called the advance EITC. You complete Form W-5 and give it to your employer's payroll department.
Your employer then adds a small amount to each paycheck based on an estimate of your annual credit. When you file your tax return the following year, the IRS adjusts the total — if you received more in advance than you were may have access to to, you owe the difference back; if you received less, you get the remainder as a refund.
Most people do not use the advance EITC because the amount added to each paycheck is small, and it is simpler to receive the full credit as a refund when filing. However, if you need the money throughout the year, it is an option.
Self-employed people and gig workers can claim the EITC
If you are self-employed or work as an independent contractor, you can still receive the EITC. You calculate your net self-employment income by subtracting your business expenses from your gross income. This net amount counts as your earned income for EITC purposes.
You report self-employment income on Schedule C (or Schedule C-EZ for straightforward situations) and pay self-employment tax on it. The net profit from Schedule C is what you use to determine whether you fall within the EITC income limits. Even if your net profit is small, you may still receive the credit if you have children.
Keep records of your business income and expenses so you can accurately report them on your tax return. If the IRS audits your return, you will need to show documentation of your earnings and deductions.
Frequently Asked Questions
Can I receive the EITC if I have no children?
Yes, but the credit is much smaller. A single person with no children can receive a few hundred dollars if their income is low enough. You must be between ages 25 and 64 (with some exceptions for military service) and cannot be claimed as a dependent on someone else's return.
What happens if I claim a child who does not meet the requirements?
The IRS may deny the credit and ask you to repay it, plus interest and penalties. Make sure any child you claim as a dependent for the EITC actually lived with you for more than half the year, is under 17, and is related to you by blood or adoption.
Do I have to repay the EITC if my income changes during the year?
No. The EITC is based on your actual income for the full year, reported on your tax return. If you earned less than expected, you may receive a larger credit. If you earned more, you may receive a smaller one or none at all, but you do not owe anything back.
Can I claim the EITC if I am not a U.S. citizen?
You must be a U.S. citizen or resident alien for the entire tax year. If you have an ITIN and are not a resident alien, you cannot claim the EITC, even if you have earned income and children.
What if I made a mistake on my EITC claim last year?
You can file an amended return using Form 1040-X to correct the error. If you received too much credit, you will owe the difference; if you received too little, you will get a refund. File the amended return as soon as you notice the mistake.