Wavebreakmedia for Getty Images
There’s an important holiday to celebrate in January—and it isn’t New Year’s or Dr. Martin Luther King Jr. Day. The IRS designated January 26 Earned Income Tax Awareness Day in an effort to get more people to understand what it’s about. The IRS says that one in five taxpayers eligible for Earned Income Tax Credit (EITC)—which is worth up to $7,430 in tax year 2023—don’t claim this valuable, yet little-known tax credit.
If fact, in a 2021 video, the IRS said that families who claimed the Earned Income Tax Credit, combined with other tax credits, like the Child Tax Credit, and the Child and Dependent Care Credit, could see a tremendous amount of savings—totaling up to $25,000. And unlike the other tax credits, you don’t even have to have a child to claim the EITC.
During the Covid-19 pandemic, President Biden signed the American Rescue Plan Act into law, a series of measures aimed to help Americans get back on their feet. The age limit from the Earned Income Tax Credit was lifted, enabling 18–24 year olds and those over 65 to receive this credit; however, these expanded benefits expired, along with other relief measures, in 2022. That means that to be eligible for the Expanded Income Tax Credit in 2023 and 2024, you now must be between the ages of 25 and 65.
Related: How much is the 2023 Child Tax Credit? Has it increased?
What is the Earned Income Tax Credit?
The Earned Income Tax Credit offers a tax break to low- and moderate-income workers and families. Claiming this credit helps to reduce the amount of taxes you owe—or increase your refund amount.
Research has proven that the Earned Income Tax Credit has helped lift more than 5.6 million households out of poverty and is considered the country’s largest “cash-based safety net” program.
Since the EITC is a refundable tax credit, that means even if you don’t owe any taxes, you could still receive it as a refund.
The Earned Income Tax Credit amount takes into account your tax filing status as well as how many children or dependents you have. Generally, the less you make, the larger your EITC will be. Families and those who are disabled are eligible for the biggest credit amounts. In 2022, 93 million Americans claimed the Earned Income Tax Credit and received an average of $2,541.
In order to claim the Earned Income Tax Credit, you must have worked in the year you are claiming the credit, and your income cannot exceed certain thresholds.
Types of income eligible for the Earned Income Tax Credit include:
- Wages, salary or tips
- Gig work, such as selling products online, driving a car for deliveries, freelance jobs
- Self-employment income
- Benefits from a union strike
- Certain disability benefits you received prior to reaching retirement age
- Nontaxable combat pay
Unemployment benefits, Social Security, pensions or annuities, alimony, child support, and interest and dividends do not qualify towards the Earned Income Tax Credit.
2023 Earned Income Tax Credit table (for taxes filed in 2024)
For tax year 2023, the maximum Earned Income Tax Credit is worth $7,430—that goes to a family with three or more qualifying children if you earn less than $56,838 (single filers and head of households) or $63,398 (married filing jointly).
But even if you don’t have a child, eligible workers between 25 and 64 years old can claim up to $600 if your income falls below $17,640 (single filers and heads of households) and $24,210 (married filing jointly).
To receive the Earned Income Tax Credit, your adjusted gross income must not exceed these income limits:
| Children or dependents claimed | Earned Income Tax Credit | Adjusted Gross Income Single Filer | Adjusted Gross Income Head of Household | Adjusted Gross Income Married Filing Jointly |
|---|---|---|---|---|
0 |
$600 |
$17,640 |
$17,640 |
$24,210 |
1 |
$3,995 |
$46,560 |
$46,560 |
$53,120 |
2 |
$6,604 |
$52,918 |
$52,918 |
$59,478 |
3 or more |
$7,430 |
$56,838 |
$56,838 |
$63,398 |
In addition, your investment income must be less than $11,000.
There’s other fine print to receiving the EITC, especially if you are separated but still married, are in the military or the clergy, or earned disability income or foreign income—so if you fall into those specific categories, check the IRS website for complete details.
2024 Earned Income Tax Credit (for taxes filed in 2025)
In tax year 2024, the Earned Income Tax Credit will increase from $632 for single filers and heads of households with no children or dependents earning less than $17,640, to up to $7,830 for those with three or more children or dependents.
| Children or dependents claimed | Earned Income Tax Credit | Adjusted Gross Income Single Filer | Adjusted Gross Income Head of Household | Adjusted Gross Income Married Filing Jointly |
|---|---|---|---|---|
0 |
$632 |
$18,591 |
$18,591 |
$25,511 |
1 |
$4,213 |
$49,084 |
$49,084 |
$56,004 |
2 |
$6,960 |
$55,768 |
$55,768 |
$62,688 |
3 or more |
$7,830 |
$59,899 |
$59,899 |
$66,819 |
The limit for investment income also rises to $11,600.
How do you qualify for the Earned Income Tax Credit?
The easiest way to find out if you’re eligible for the Earned Income Tax Credit is to check with the IRS itself. It has created a step-by-step calculator called the EITC Assistant that determines what—and how much—you’re entitled to. (It will also help you find out your tax filing status if you don’t know it already.) You’ll need to have your W-2 or 1099 forms on hand, plus any documents that detail your expenses as well as the amount of taxes you’ve withheld, or any income paid to you.
How do you claim the Earned Income Tax Credit?
In September 2023, the IRS mailed letters to eligible taxpayers encouraging them to claim the Earned Income Tax Credit and provided instructions based on their specific situations. But even if you didn’t receive a letter (or failed to hang on to it), claiming it is relatively easy.
You can claim the Earned Income Tax Credit by filling out the Form 1040. If you are claiming dependents, you will also need to fill out Schedule EIC. Make sure to have everyone’s Social Security number and date of birth on hand.
- The IRS encourages people to use its Free File program, which is free tax preparation software available from the IRS.
- New this year (in select states) is the IRS Direct File pilot program, another free program which allows users to upload their tax forms directly to the IRS.
- Free Volunteer Income Tax Assistance is available for low-income taxpayers from a network of trained nonprofit, local and state government, and university providers. They also provide services for people with disabilities and non-English speakers.
When will I get my Earned Income Tax Credit refund?
Even though tax filing season began on January 29, the earliest date you can receive your Earned Income Tax Credit is February 27, 2024. As always, the IRS reminds taxpayers that filing online and opting to have their refunds directly deposited will be the fastest possible route.
What happens if you make a mistake on the Earned Income Tax Credit?
Mistakes can and do happen—if there’s an error on your Earned Income Tax Credit submission, the IRS could deny your claim or ask you to pay back any amount you received in error, plus interest.
Any person found to be fraudulently filing claims could be banned from claiming the EITC for a period of between two and 10 years.
While all tax returns are scrutinized by the IRS, in 2022 Stanford University researchers discovered a racial bias apparent in one of the algorithms the agency used when reviewing EITC credits in particular. They found that Black taxpayers were 3–5 times more likely to be audited than other taxpayers, which prompted an outcry from lawmakers—and the general public.
In response, IRS Commissioner Danny Werfel promised “sweeping efforts” to overhaul and improve its tax administration practices. In a letter to Senator Ron Wyden (D-Ore.), the Chair of the Senate Finance Commission, Werfel announced that the IRS was “making broad efforts to overhaul compliance efforts in a manner that robustly advances our commitment to fair, equitable, and effective tax administration” and would redirect much of its efforts on EITC audits in order to focus more energy on collections activities of higher income taxpayers, as part of its effort to shore up the $540 billion tax gap.
Can you claim a previous year’s Earned Income Tax Credit?
The great news is, even if you weren’t aware of the Earned Income Tax Credit before now, you can file an amended return to claim them. The IRS will accept them dating back three years, to tax year 2020.
