What is the Earned Income Tax Credit (EITC)?

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The Earned Income Tax Credit is a federal tax program that reduces the amount of income tax owed by low to moderate income workers. The credit ranges from $519 to $6,431 depending on your income and the number of qualifying children in your family.

Is the Earned Income Tax Credit (EITC) known by any other name?

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The program is often referred to simply as the Earned Income Credit (EIC).

How often can I claim an EITC?

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You can claim an EITC every year that you qualify.

What are the eligibility requirements for an Earned Income Tax Credit (EITC)?

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To be eligible for the Earned Income Tax Credit (EITC) you must:
  • Have earned income from employment, self-employment or employer-paid disability benefits received prior to retirement.
  • Meet adjusted gross income requirements.
  • Have a Social Security Number valid for employment.
  • File a joint tax return if married
  • Be a U.S. citizen or resident alien. If not, you must be married to a U.S. citizen or resident alien and filing a joint tax return.
  • Live in the U.S. for more than half of the year.
  • Be 25-64 years of age, if you aren’t claiming any qualifying children (if you are claiming qualifying children, you can be any age).

In addition, you cannot:

  • Claim foreign income using Form 2555 or 2555EZ.
  • Have investment income that exceeds $3,500 for tax year 2018.
  • Be the dependent of another person.
  • Be the qualifying child of another person.

Can I use my EITC in an Individual Development Account (IDA) or a Plan to Achieve Self-Support (PASS)?

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Yes. Money received from an EITC can be deposited into an IDA and matched, or set aside in a PASS. These are two ways to achieve work or savings goals more quickly.

How do I claim an EITC?

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If you are eligible, you can claim an EITC while filing your annual federal tax return. If you don’t have any qualifying children, use IRS Form 1040, 1040A, or 1040EZ. If you have a qualifying child, you will need to use Form 1040 or 1040A and attach a Schedule EIC.

Does what I have in the bank and/or what I own affect my eligibility for an Earned Income Tax Credit (EITC)?

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While there are no asset requirements to claim the EITC, you cannot have investment income that exceeds $3,500 in tax year 2018 (filing by April 2019).

How do I know how much my EITC is worth?

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The value of your EITC is based on your adjusted gross income and the number of qualifying children in your family. You can calculate your EITC yourself by using the Earned Income Credit Worksheet in Form 1040, Form 1040A, or Form 1040EZ. Or you can ask the IRS to calculate it for you by noting an “EIC” in the Earned Income Credit line on your tax return.

For an estimate on the value of your EITC, use the Center on Budget and Policy Priorities Tax Credit Calculator.

When can I receive benefits from the Earned Income Tax Credit (EITC)?

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You can claim your Earned Income Tax Credit when filing your annual federal tax return. The IRS can deposit the credit to your bank account or send you a check by mail. The method you chose and how early you file will determine how quickly you get your credit, but it is usually within 2-3 weeks of filing.

Do I have to meet any residency or citizenship requirements to qualify for an Earned Income Tax Credit (EITC)?

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Yes. To qualify for the Earned Income Tax Credit, you must live in the U.S. for more than half the year. You must also be a U.S. citizen or resident alien. If not, you must be married to a U.S. citizen or resident alien and filing a joint tax return.

How do I know if I have a “qualifying child”?

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To be a qualifying child under EITC rules, the child must
  • Be related to you: The child must be your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of these (for example, be your grandchild, niece, or nephew)
  • Live with you: Generally, the child must live at in the same house as you for 6 months or longer each year and have a valid Social Security number. (There are some exceptions to this. For the complete list of exceptions, read IRS Publication 596.)
  • Be under the age of 19: At the end of the tax year, the child must be under 19. Or, if attending school full-time, the child must be under 24. The only exception is for children who are permanently and totally disabled. If your child is permanently and totally disabled, they can be any age, even an adult.