What is the Earned Income Tax Credit?
The earned income tax credit (EITC) is a federal tax break for low- and moderate-income workers with or without children.
Also known as the earned income credit (EIC), the amount you get depends on your income, filing status, and the number of qualifying children. It’s also a refundable credit, meaning you can get a tax refund even if you don’t owe taxes.
Each year, families look forward to these tax breaks as they can help pay for food, housing, or expenses related to their child’s education and extracurricular activities. The funds can sometimes be used to create a nest egg for emergency savings.
- Nationwide, 23 million eligible workers received $57 billion in EITC last year
- The average household received about $2,541 in EITC for the 2022 tax year (taxes filed in early 2023)
The IRS just announced the annual inflation adjustment for the earned income tax credit, as well as other key family tax breaks for tax year 2025.
Here’s what you should know about the earned income tax credit and whether you qualify for the tax break.
A poverty-fighting tax break
The earned income tax credit has been around for nearly 50 years, and like the child tax credit, it's known as one of the nation’s best poverty-fighting programs for low- and moderate-income earners. The earned income tax credit reduces poverty by supplementing the earnings of low-wage workers.
Before the pandemic, the EITC combined with the child tax credit helped lift 10.6 million people above the poverty line and lessen poverty for 17.5 million households.
According to the Center for Budget and Policy Priorities, these programs lifted 5.5 million children from poverty and reduced poverty to 6.4 million.
Who qualifies for the EITC
The amount of EITC you get depends on your income, filing status, and number of qualifying children in your household. However, folks without children can also qualify for the EIC.
Whether you are a working individual with children or work but do not have children – to qualify for the 2024 earned income tax credit, you must meet the following basic criteria:
- You must work and have an earned income under $66,819
- Have an investment income below $11,600 in tax year 2024
- Be a U.S. citizen or resident alien all year
- You will not file a Form 2555, Foreign Earned Income
- You must have a valid Social Security number
Social Security number requirement:
Keep in mind, for the EITC the IRS will not accept the following forms of identification:
- Individual taxpayer identification numbers (ITIN)
- Adoption taxpayer identification numbers (ATIN)
- Social Security numbers or Social Security cards that specify “Not Valid for Employment.”
Earned income tax credit qualifications with children
As mentioned, the eligibility standards for the EITC are split into two categories: those with children and those without. If you have a child, the IRS requires that you meet the following criteria.
- The child must meet age, relationship, and residency requirements
- The qualifying child cannot be claimed by more than one person for the EITC
- The taxpayer cannot be the qualifying child, or dependent of another person
Age
For a child to qualify for the earned income tax credit, they must be under the age of 19 or a full-time student under 24. They must also be younger than you (or your spouse, if filing jointly).
There is one exception: If your child is permanently and totally disabled the age requirements don’t apply for the EITC. (See: Disability and the Earned Income Tax Credit).
Relationship
To qualify for the EITC, your child must be your son, daughter, stepchild, or adopted child or foster child. They may also be your sibling, half-sibling, or step-sibling. Grandchildren and nieces or nephews are also eligible to be claimed as dependents for the EITC.
Residency
To claim a child for the earned income tax credit, your child must live in the same home as you in the United States for more than half of the tax year. The U.S. includes the 50 states, the District of Columbia, and U.S. military bases. The United States territories are not included: Guam, the Virgin Islands, or Puerto Rico.
Dependent status
If your child can file a joint return with another person (for example, their husband or wife), you cannot claim them on your tax return for the EITC.
Earned income tax credit qualifications without children
If you don’t have a qualifying child, you can still claim the EITC if you meet all of the following eligibility rules:
- You must meet the basic earned income tax credit qualifying rules
- Your main home is in the United States for more than half the tax year
- You must be at least 25 years old but under 65
- You’re not claimed as a qualifying child on anyone’s tax return
What disqualifies you from the EITC?
There are a couple of factors that can disqualify you from the EITC. If one of the following applies to you, you will not be eligible for the tax credit:
- You or your spouse don’t have a valid SSN.
- Your earned income and adjusted gross income (AGI) exceeds the EIC limit.
- Your foreign income investment exceeds the EIC limit.
- You’ve claimed foreign earned income exclusion on Form 2555.
- You filed your tax return as ‘Married Filing Separately.’
Keep in mind: your EITC will be denied if you, the taxpayer, are claimed as a dependent on another person’s tax return or if your child doesn’t meet “qualifying” eligibility criteria.
How to claim the EITC
You can claim the earned income tax credit by filing federal tax return Form 1040 or 1040-SR, for U.S. seniors. If you have a qualifying child, you’ll be required to file a Schedule EIC. The form will ask you for details regarding the qualifying child, such as their name, SSN, their date of birth, relationship to you, and number of months they’ve lived with you.
You can also claim the EITC for prior years.
The IRS gives you three years to file and claim a refund from the due date of your tax return. If you’re eligible, you could still have time to claim the EITC for prior years, including:
- For 2022, if you file your tax return by April 18, 2026
- For 2021, if you file your tax return by April 18, 2025
- For 2020, if you file your tax return by May 17, 2024
To file a prior year return complete and file Form 1040 and Schedule EIC for the corresponding year, or file an amended return if you already filed but did not include a Schedule EIC (if you had a qualifying child).
2024 Earned Income Tax Credit
The EITC is designed for people whose earned income was under $66,819 for tax year 2024 (tax returns generally filed in early 2025). The amount you get will depend on your adjusted gross income, the amount of investment income earned, your filing status, and whether you have a qualifying child.
Notably, the EITC amounts and phaseout amounts are adjusted for inflation each year. One piece of good news is that tax filers next year will be able to claim slightly more than they did in tax year 2023.
Investment income limit for 2024: $11,600.
Does your state have an EITC?
To date, 31 states, plus the District of Columbia and Puerto Rico, have their state or local government version of the earned income credit in addition to the federal EITC.
Ten states including California, Colorado, Illinois, Maine, Maryland, Minnesota, New Mexico, Oregon, Vermont, and Washington, plus the District of Columbia, have reportedly extended eligibility of the credits to certain immigrant taxpayers who file taxes using Individual Tax Identification Numbers (ITIN).
This year, two states expanded their EITCs.
- Colorado: The earned income credit will match 50% of the federal credit in 2024
- Illinois: The state expanded the credit for families with children under 12 years old by 20% in 2024 and 40% for subsequent years. That equals a match of 24% to the federal EITC for 2024 and 28% moving forward.
EITC: Learn more
If you’d like more information about the earned income tax credit for yourself, a friend, or a family member keep an eye out for EITC Awareness Day.
Each year, the IRS takes a day to shed light on the refundable credits many low- and moderate-income households could be missing out on.
Free tools are also available to help you learn about the EITC and other family tax credits you could be eligible for. (See the IRS EITC Assistant). You can also talk to a certified tax professional if you suspect you may qualify for the federal tax break.
If you’re a government agency, employer, tax preparer, or resident of a rural community who would like to raise awareness about the EITC, you can also see the IRS Partner’s ToolKit or Tax Preparer ToolKit.
