How Much Do You Get On Earned Income Credit? The Earned Income Credit (EIC), also known as the Earned Income Tax Credit (EITC), can significantly boost your income, especially if you’re a working individual or family with a modest income, and at income-partners.net, we aim to guide you through this process. This refundable tax credit could put thousands of dollars back in your pocket. Understanding the ins and outs of EITC can lead to substantial financial benefits.
1. What is the Earned Income Credit (EITC)?
The Earned Income Credit (EITC) is a refundable tax credit in the United States for low- to moderate-income working individuals and families. It essentially reduces the amount of tax you owe and may give you a refund, even if you don’t owe any taxes. The EITC is designed to supplement earnings and provide an incentive to work. This is a critical aspect for those looking to boost their income through available tax benefits.
The primary purpose of the EITC is to provide financial relief and encourage employment among low- to moderate-income individuals and families. According to research from the Brookings Institution in July 2023, the EITC is one of the most effective anti-poverty programs in the U.S., particularly for families with children.
1.1 Key Aspects of the EITC:
- Refundable Credit: Unlike non-refundable credits, if the EITC exceeds the amount of taxes you owe, you will receive the difference as a refund.
- Income-Based: Eligibility is based on your earned income and adjusted gross income (AGI).
- Family Size: The amount of the credit varies based on the number of qualifying children you have.
- Filing Status: Your filing status (e.g., single, married filing jointly) also affects your eligibility and credit amount.
- Work Requirement: You must have earned income to qualify, meaning income from employment or self-employment.
1.2 Who is Eligible for the EITC?
Eligibility for the EITC depends on several factors that determine whether you can claim the credit. Key criteria include:
- Earned Income: You must have earned income, such as wages, salary, tips, or net earnings from self-employment.
- Adjusted Gross Income (AGI): Your AGI must be below certain limits, which vary depending on your filing status and the number of qualifying children you have.
- Filing Status: You cannot file as “married filing separately” unless you meet specific criteria, such as those outlined in the American Rescue Plan Act (ARPA) of 2021.
- Residency: You must be a U.S. citizen or resident alien for the entire tax year.
- Qualifying Child (if applicable): If you claim the credit with a qualifying child, that child must meet specific age, relationship, and residency requirements.
- Investment Income: Your investment income must be below a certain limit.
- Social Security Number: You and any qualifying children must have valid Social Security numbers.
For example, for the tax year 2023, the AGI limits for those filing as single, head of household, or married filing separately with no children are $17,640, while those filing jointly have a limit of $24,210.
1.3 Why is the EITC Important?
The EITC plays a crucial role in supporting working families and reducing poverty. It encourages workforce participation by making work more rewarding, supplementing low wages, and helping families meet basic needs. The EITC is also beneficial for local economies, as recipients often spend their refunds on goods and services, boosting economic activity. As stated by the Center on Budget and Policy Priorities in February 2024, the EITC lifts millions of people out of poverty each year.
2. How is the Earned Income Credit Calculated?
Calculating the Earned Income Credit involves several factors, including your income, filing status, and the number of qualifying children you have. Understanding these components will help you estimate the amount of credit you may be eligible for. Each year, the IRS publishes tables with income thresholds and credit amounts, which you can use as a reference. This clarity is vital for maximizing your financial benefits through strategic tax planning.
2.1 Key Components of the EITC Calculation:
- Earned Income: This includes wages, salaries, tips, and net earnings from self-employment. It does not include unearned income such as interest, dividends, pensions, or Social Security benefits.
- Adjusted Gross Income (AGI): AGI is your gross income minus certain deductions, such as contributions to traditional IRAs, student loan interest, and alimony payments.
- Filing Status: Your filing status (single, married filing jointly, head of household, etc.) affects the income thresholds and credit amounts.
- Qualifying Children: If you have qualifying children, the credit amount increases. A qualifying child must meet specific requirements related to age, relationship, and residency.
- Maximum Credit Amount: The IRS sets maximum credit amounts each year, based on the number of qualifying children.
2.2 Understanding the EITC Tables:
The IRS provides EITC tables that show the maximum credit amounts based on income levels and family size. These tables are essential for determining the credit amount you may be eligible for.
Here’s how to use them:
- Find the Correct Table: Select the table for the tax year you are interested in (e.g., 2024, 2023, 2022).
- Identify Your Filing Status: Determine your filing status (e.g., single, married filing jointly).
- Determine the Number of Qualifying Children: Count the number of qualifying children you have.
- Locate Your Income Range: Find the range in the table that includes your AGI.
- Find the Maximum Credit Amount: The table will show the maximum credit amount for your income range, filing status, and number of qualifying children.
Example Scenario:
Let’s say you are filing as single with two qualifying children for the tax year 2023. Your AGI is $45,000. Using the EITC table for 2023, you would find the row for “Two Children” and the column for “Filing as Single.” The table would show the maximum credit amount for your income range, which could be around $6,604.
2.3 Factors Affecting the Credit Amount:
Several factors can influence the amount of EITC you receive:
- Changes in Income: An increase or decrease in your earned income can affect your eligibility and the credit amount.
- Changes in Family Status: Getting married, divorced, or having a child can change your filing status and the number of qualifying children, impacting your credit.
- Investment Income: If your investment income exceeds the limit, you may not be eligible for the EITC, regardless of your earned income.
- Tax Law Changes: Tax laws can change from year to year, affecting the income thresholds, credit amounts, and eligibility rules.
- Errors on Tax Return: Mistakes on your tax return, such as incorrect income reporting or claiming a non-qualifying child, can lead to a reduced or denied credit.
Staying informed about these factors can help you accurately calculate your EITC and avoid potential issues when filing your taxes.
3. EITC Amounts for Different Tax Years
The amount you can receive from the Earned Income Tax Credit (EITC) varies each year due to adjustments for inflation and changes in tax laws. Understanding the specific amounts and criteria for different tax years is crucial for accurate tax planning. These details help in optimizing strategies for maximizing tax credits.
3.1 Tax Year 2024
For the tax year 2024, the maximum AGI, investment income, and credit amounts are as follows:
| Children or Relatives Claimed | Filing as Single, Head of Household, Married Filing Separately, or Widowed | Filing as Married Filing Jointly |
|---|---|---|
| Zero | $18,591 | $25,511 |
| One | $49,084 | $56,004 |
| Two | $55,768 | $62,688 |
| Three | $59,899 | $66,819 |
Investment Income Limit: $11,600 or less
Maximum Credit Amounts:
- No qualifying children: $632
- 1 qualifying child: $4,213
- 2 qualifying children: $6,960
- 3 or more qualifying children: $7,830
3.2 Tax Year 2023
For the tax year 2023, the maximum AGI, investment income, and credit amounts are as follows:
| Children or Relatives Claimed | Filing as Single, Head of Household, Married Filing Separately, or Widowed | Filing as Married Filing Jointly |
|---|---|---|
| Zero | $17,640 | $24,210 |
| One | $46,560 | $53,120 |
| Two | $52,918 | $59,478 |
| Three | $56,838 | $63,398 |
Investment Income Limit: $11,000 or less
Maximum Credit Amounts:
- No qualifying children: $600
- 1 qualifying child: $3,995
- 2 qualifying children: $6,604
- 3 or more qualifying children: $7,430
3.3 Tax Year 2022
For the tax year 2022, the maximum AGI, investment income, and credit amounts were as follows:
| Children or Relatives Claimed | Filing as Single, Head of Household, Married Filing Separately, or Widowed | Filing as Married Filing Jointly |
|---|---|---|
| Zero | $16,480 | $22,610 |
| One | $43,492 | $49,622 |
| Two | $49,399 | $55,529 |
| Three | $53,057 | $59,187 |
Investment Income Limit: $10,300 or less
Maximum Credit Amounts:
- No qualifying children: $560
- 1 qualifying child: $3,733
- 2 qualifying children: $6,164
- 3 or more qualifying children: $6,935
3.4 Tax Year 2021
For the tax year 2021, the maximum AGI, investment income, and credit amounts were as follows:
| Children or Relatives Claimed | Filing as Single, Head of Household, Widowed, or Married Filing Separately* | Filing as Married Filing Jointly |
|---|---|---|
| Zero | $21,430 | $27,380 |
| One | $42,158 | $48,108 |
| Two | $47,915 | $53,865 |
| Three | $51,464 | $57,414 |
Investment Income Limit: $10,000 or less
Maximum Credit Amounts:
- No qualifying children: $1,502
- 1 qualifying child: $3,618
- 2 qualifying children: $5,980
- 3 or more qualifying children: $6,728
* Taxpayers claiming the EITC who filed married filing separately had to meet specific eligibility requirements under the special rule in the American Rescue Plan Act (ARPA) of 2021.
3.5 Tax Year 2020
For the tax year 2020, the maximum AGI, investment income, and credit amounts were as follows:
| Children or Relatives Claimed | Filing as Single, Head of Household, or Widowed | Filing as Married Filing Jointly |
|---|---|---|
| Zero | $15,820 | $21,710 |
| One | $41,756 | $47,646 |
| Two | $47,440 | $53,330 |
| Three | $50,594 | $56,844 |
Investment Income Limit: $3,650 or less
Maximum Credit Amounts:
- No qualifying children: $538
- 1 qualifying child: $3,584
- 2 qualifying children: $5,920
- 3 or more qualifying children: $6,660
3.6 How to Find the Most Up-to-Date Information:
To find the most current information on EITC amounts, AGI limits, and eligibility criteria, follow these steps:
- Visit the IRS Website: The IRS provides detailed information on the EITC, including updated tables and guidelines each year.
- Use the EITC Assistant: The IRS offers an online tool, the EITC Assistant, to help you determine if you are eligible for the credit.
- Consult a Tax Professional: A tax professional can provide personalized advice based on your specific financial situation and help you navigate the complexities of the EITC.
4. Qualifying Child Rules for EITC
To claim the Earned Income Tax Credit (EITC) with a qualifying child, both you and the child must meet specific requirements. These rules ensure that only eligible families receive the credit, as defined by the IRS. Understanding these rules is essential for accurately claiming the EITC and avoiding potential issues with your tax return.
4.1 Basic Requirements for a Qualifying Child:
To be considered a qualifying child for the EITC, the child must meet the following tests:
- Age Test: The child must be under age 19 at the end of the tax year, or under age 24 if a full-time student, or any age if permanently and totally disabled.
- Relationship Test: The child must be your son, daughter, stepchild, adopted child, foster child, sibling, step-sibling, half-sibling, or a descendant of any of these (e.g., grandchild, niece, nephew).
- Residency Test: The child must live with you in the United States for more than half of the tax year. Temporary absences for reasons such as education, medical care, or military service are generally considered as time lived at home.
- Joint Return Test: The child cannot file a joint return with their spouse, unless the child and their spouse are filing only to claim a refund of withheld income tax or estimated tax paid.
- Citizenship Test: The child must be a U.S. citizen, U.S. national, or U.S. resident alien.
- Not Be Claimed as a Dependent by Someone Else: The child cannot be claimed as a dependent on someone else’s return.
4.2 Special Rules and Exceptions:
There are some special rules and exceptions to the qualifying child requirements:
- Qualifying Child of More Than One Person: If a child meets the requirements to be a qualifying child of more than one person, the IRS has tie-breaker rules to determine who can claim the EITC. These rules consider factors such as who the child lived with for the longer period and who has the higher adjusted gross income.
- Child Living with Non-Parent: If a child lives with someone who is not their parent (e.g., a grandparent, aunt, or uncle), that person may be able to claim the EITC if they meet all the qualifying child requirements and the parent does not claim the child for EITC purposes.
4.3 Documentation and Proof:
To support your claim for the EITC with a qualifying child, it’s essential to keep accurate records and documentation, including:
- Birth Certificates: To prove the child’s age and relationship to you.
- School Records: To verify the child’s student status if they are between 19 and 24.
- Medical Records: To document a child’s permanent and total disability, if applicable.
- Proof of Residency: Such as school records, medical records, or letters from third parties, to verify that the child lived with you for more than half the year.
- Social Security Cards: For both you and the qualifying child, to confirm Social Security numbers.
4.4 Common Mistakes to Avoid:
- Misunderstanding the Residency Test: Ensure the child lives with you for more than half the year. Temporary absences are generally acceptable, but permanent moves can disqualify the child.
- Incorrectly Claiming a Child Who Files a Joint Return: If the child files a joint return (other than for a refund), they are not a qualifying child for the EITC.
- Failing to Meet the Relationship Test: Only certain relatives can qualify as a qualifying child.
- Claiming a Child Who is Claimed by Someone Else: If someone else has a higher priority claim to the child, you may not be able to claim the EITC.
Avoiding these mistakes will help ensure that you accurately claim the EITC and receive the correct credit amount.
5. Claiming the EITC Without a Qualifying Child
Even if you don’t have a qualifying child, you may still be eligible for the Earned Income Tax Credit (EITC). The requirements for claiming the EITC without a qualifying child are different but provide an opportunity for single individuals and couples without children to benefit from this credit. Understanding these rules is important for maximizing your tax benefits.
5.1 Eligibility Requirements Without a Qualifying Child:
To claim the EITC without a qualifying child, you must meet the following requirements:
- Age Requirement: You must be at least age 25 but under age 65 at the end of the tax year.
- Residency Requirement: You must live in the United States for more than half of the tax year.
- Not a Dependent: You cannot be claimed as a dependent on someone else’s return.
- Filing Status: You cannot file as “married filing separately.”
- Earned Income: You must have earned income, such as wages, salary, tips, or net earnings from self-employment.
- AGI Limits: Your adjusted gross income (AGI) must be below certain limits, which vary each year.
- Investment Income: Your investment income must be below a certain limit.
- Social Security Number: You must have a valid Social Security number.
5.2 AGI and Credit Amounts for Individuals Without Qualifying Children:
The AGI limits and maximum credit amounts for individuals without qualifying children vary each year. Here are the amounts for recent tax years:
Tax Year 2024:
- AGI Limit (Single, Head of Household, Married Filing Separately, or Widowed): $18,591
- AGI Limit (Married Filing Jointly): $25,511
- Maximum Credit Amount: $632
Tax Year 2023:
- AGI Limit (Single, Head of Household, Married Filing Separately, or Widowed): $17,640
- AGI Limit (Married Filing Jointly): $24,210
- Maximum Credit Amount: $600
Tax Year 2022:
- AGI Limit (Single, Head of Household, Married Filing Separately, or Widowed): $16,480
- AGI Limit (Married Filing Jointly): $22,610
- Maximum Credit Amount: $560
Tax Year 2021:
- AGI Limit (Single, Head of Household, Married Filing Separately, or Widowed): $21,430
- AGI Limit (Married Filing Jointly): $27,380
- Maximum Credit Amount: $1,502
Tax Year 2020:
- AGI Limit (Single, Head of Household, or Widowed): $15,820
- AGI Limit (Married Filing Jointly): $21,710
- Maximum Credit Amount: $538
5.3 Examples of Eligible Individuals:
- Single Individuals: A single individual aged 30 who works full-time and earns a low to moderate income may be eligible for the EITC, provided they meet all other requirements.
- Married Couples Without Children: A married couple without children, both aged between 25 and 65, may be eligible if they both work and their combined income is below the AGI limits.
- Older Workers: Individuals aged 64 who are still working may be eligible if they meet the income and other requirements.
5.4 Common Mistakes to Avoid:
- Age Requirement: Ensure you are at least 25 but under 65 years old.
- Dependent Status: Make sure you are not claimed as a dependent on someone else’s tax return.
- Filing Status: Do not file as “married filing separately.”
- Income Limits: Keep your AGI and investment income below the specified limits.
- Residency Requirement: Live in the United States for more than half of the tax year.
By understanding and meeting these requirements, you can maximize your chances of receiving the EITC, even without a qualifying child.
6. Self-Employment Income and the EITC
If you are self-employed, you can still qualify for the Earned Income Tax Credit (EITC). However, there are specific rules and considerations for self-employed individuals to ensure accurate reporting and eligibility. Navigating these rules is crucial for self-employed individuals to leverage the EITC effectively.
6.1 What Counts as Self-Employment Income?
Self-employment income includes any income you earn from running a business, freelancing, or working as an independent contractor. Common examples include:
- Freelance Work: Income from providing services such as writing, graphic design, or consulting.
- Gig Economy: Earnings from driving for ride-sharing services, delivering food, or performing tasks through online platforms.
- Small Business Ownership: Profits from operating a small business, whether it’s a retail store, restaurant, or service-based company.
- Farming: Income from agricultural activities, such as growing crops or raising livestock.
- Rental Income: If you actively manage rental properties, the income may be considered self-employment income.
6.2 Calculating Self-Employment Income for the EITC:
To calculate your self-employment income for the EITC, you must determine your net earnings. This is done by subtracting your business expenses from your gross income. Use Schedule C (Form 1040), Profit or Loss From Business, to report your income and expenses.
Steps to Calculate Net Earnings:
-
Determine Gross Income: Add up all the income you received from your business activities.
-
Identify Deductible Expenses: List all allowable business expenses, such as:
- Office supplies
- Rent for business property
- Utilities
- Advertising
- Vehicle expenses
- Insurance
- Contract labor
-
Calculate Net Earnings: Subtract the total deductible expenses from your gross income.
Net Earnings = Gross Income – Total Deductible Expenses -
Include Self-Employment Tax: You must also calculate and pay self-employment tax, which includes Social Security and Medicare taxes. You can deduct one-half of your self-employment tax from your gross income to arrive at your adjusted gross income (AGI).
6.3 Common Deductions for Self-Employed Individuals:
- Home Office Deduction: If you use a portion of your home exclusively and regularly for business, you may be able to deduct expenses related to that space.
- Vehicle Expenses: You can deduct the actual expenses of operating your vehicle for business purposes or take the standard mileage rate.
- Business Insurance: Premiums paid for business insurance policies are deductible.
- Retirement Contributions: Contributions to a self-employed retirement plan, such as a SEP IRA or solo 401(k), are deductible.
- Health Insurance Premiums: You may be able to deduct the amount you paid for health insurance premiums for yourself, your spouse, and your dependents.
6.4 Special Considerations for Self-Employed Individuals:
- Accurate Record-Keeping: Maintaining accurate and complete records of your income and expenses is essential. This includes receipts, invoices, bank statements, and other supporting documents.
- Consistency: Be consistent in your accounting methods from year to year.
- Professional Advice: Consult with a tax professional to ensure you are taking all eligible deductions and accurately reporting your self-employment income.
- Estimated Taxes: Self-employed individuals are generally required to pay estimated taxes quarterly to avoid penalties.
6.5 Avoiding Common Mistakes:
- Overstating Expenses: Only deduct legitimate business expenses. Overstating expenses can lead to penalties and interest.
- Not Keeping Records: Failing to keep adequate records can make it difficult to substantiate your deductions and income.
- Ignoring Self-Employment Tax: Remember to calculate and pay self-employment tax.
7. EITC and Military Families
Military families can also benefit from the Earned Income Tax Credit (EITC), but there are specific rules and considerations that apply to those serving in the armed forces. Understanding these provisions ensures that military families can accurately claim the credit.
7.1 Special Rules for Combat Pay:
One of the primary considerations for military families is the treatment of combat pay. Combat pay, also known as nontaxable combat pay, is the pay received by service members while serving in a combat zone. While this pay is not subject to federal income tax, it can affect eligibility for the EITC.
Key Rules for Combat Pay and the EITC:
- Election to Include Combat Pay: Service members have the option to include their nontaxable combat pay as earned income for the purposes of calculating the EITC. This can potentially increase the amount of the credit they are eligible for.
- Form W-2, Box 12 (Code Q): Nontaxable combat pay is reported in Box 12 of Form W-2 with code Q.
- Making the Election: To include combat pay, you simply add it to your other earned income when calculating your EITC. If you choose not to include it, you calculate the EITC based only on your taxable income.
- Consistency: You can make this election each year, but you must treat all nontaxable combat pay the same way. You can’t include some and exclude others.
7.2 Benefits of Including Combat Pay:
Including nontaxable combat pay in your earned income can potentially increase the amount of the EITC you receive. This is because the EITC is designed to supplement low to moderate incomes. By increasing your reported income, you may move into a higher EITC bracket, resulting in a larger credit.
7.3 Qualifying Child Rules for Military Families:
The qualifying child rules for the EITC apply to military families in the same way they apply to civilian families. However, there are some special considerations related to residency and temporary absences due to military service:
- Residency Test: The child must live with you in the United States for more than half of the tax year. However, temporary absences due to military service are generally considered as time lived at home.
- Extended Deployment: If you are deployed for an extended period, the IRS may still consider the child as living with you for the purposes of the EITC, as long as your home remains the child’s main residence.
7.4 Examples of Military Families and the EITC:
- Scenario 1: Single Service Member with a Child: A single service member with one qualifying child receives $30,000 in taxable income and $10,000 in nontaxable combat pay. By including the combat pay, their earned income increases to $40,000, potentially increasing their EITC amount.
- Scenario 2: Married Couple with One Spouse Deployed: A married couple has one spouse deployed in a combat zone. The deployed spouse receives $40,000 in taxable income and $15,000 in nontaxable combat pay. By including the combat pay, their combined earned income increases, potentially leading to a higher EITC.
7.5 Resources for Military Families:
- IRS Publications: The IRS provides publications and resources specifically for military families, including information on the EITC and other tax benefits.
- Military Tax Assistance: The military offers free tax assistance services through the Volunteer Income Tax Assistance (VITA) program. VITA volunteers can help military families understand and claim the EITC.
- Financial Counseling: Military families can access financial counseling services through various organizations, which can provide guidance on tax planning and financial management.
8. How to Claim the Earned Income Credit
Claiming the Earned Income Tax Credit (EITC) involves several steps, including determining your eligibility, gathering necessary documents, and accurately completing your tax return. Following these steps will ensure that you receive the correct credit amount.
8.1 Step-by-Step Guide to Claiming the EITC:
-
Determine Your Eligibility: Before you begin, make sure you meet all the eligibility requirements for the EITC, including income limits, filing status, and qualifying child rules (if applicable).
-
Gather Necessary Documents: Collect all the documents you will need to complete your tax return, including:
- Form W-2: This form reports your wages, salary, and other compensation from your employer.
- Form 1099: If you are self-employed, you will need Form 1099-NEC to report your income.
- Social Security Cards: You will need Social Security cards for yourself, your spouse (if filing jointly), and any qualifying children.
- Records of Income and Expenses: If you are self-employed, gather records of your income and expenses to calculate your net earnings.
- Proof of Residency: If necessary, gather documents to prove that you and your qualifying child lived in the United States for more than half of the tax year.
-
Complete Your Tax Return: Use Form 1040, U.S. Individual Income Tax Return, to report your income, deductions, and credits.
-
Claim the EITC: To claim the EITC, you will need to complete Schedule EIC (Form 1040), Earned Income Credit. This form asks for information about your qualifying children (if applicable) and helps you calculate the amount of the credit.
-
File Your Tax Return: Once you have completed your tax return and Schedule EIC, file your return with the IRS by the filing deadline (usually April 15). You can file your return electronically or by mail.
8.2 Using Form 1040 and Schedule EIC:
- Form 1040: This is the standard form used to report your income, deductions, and credits. You will need to provide information such as your name, address, Social Security number, and filing status.
- Schedule EIC: This form is specifically used to claim the Earned Income Credit. It requires you to provide information about your qualifying children, such as their names, ages, and Social Security numbers.
8.3 Filing Options:
- Electronic Filing (E-Filing): E-filing is the most convenient and secure way to file your tax return. You can use tax preparation software or work with a tax professional to e-file your return.
- Paper Filing: You can also file your tax return by mail. Download the necessary forms from the IRS website, complete them, and mail them to the address listed on the form instructions.
8.4 Common Mistakes to Avoid When Claiming the EITC:
- Incorrectly Claiming a Qualifying Child: Make sure you meet all the qualifying child requirements.
- Failing to Include All Earned Income: Include all sources of earned income, such as wages, salaries, tips, and net earnings from self-employment.
- Not Meeting the AGI Limits: Ensure your adjusted gross income is below the specified limits.
- Using the Wrong Filing Status: Choose the correct filing status based on your marital status and household situation.
- Failing to Sign and Date Your Return: Make sure you sign and date your tax return before filing it.
8.5 Resources for Filing Your Taxes:
- IRS Website: The IRS website (irs.gov) provides a wealth of information on the EITC and other tax topics. You can download forms, instructions, and publications, and use online tools to help you prepare your tax return.
- Tax Preparation Software: Tax preparation software can guide you through the process of completing your tax return and claiming the EITC.
- Tax Professionals: A tax professional can provide personalized advice and assistance with your tax return.
9. Common Mistakes to Avoid with the EITC
Claiming the Earned Income Tax Credit (EITC) can be complex, and it’s easy to make mistakes that could delay your refund or result in penalties. Being aware of these common pitfalls helps ensure accuracy and compliance with tax laws.
9.1 Incorrectly Claiming a Qualifying Child:
- Not Meeting the Relationship Test: The child must be your son, daughter, stepchild, adopted child, foster child, sibling, step-sibling, half-sibling, or a descendant of any of these (e.g., grandchild, niece, nephew).
- Not Meeting the Age Test: The child must be under age 19 at the end of the tax year, or under age 24 if a full-time student, or any age if permanently and totally disabled.
- Not Meeting the Residency Test: The child must live with you in the United States for more than half of the tax year.
- Claiming a Child Who is Claimed by Someone Else: Only one person can claim the child for EITC purposes. If the child meets the requirements to be a qualifying child of more than one person, the IRS has tie-breaker rules.
9.2 Failing to Report All Income:
- Not Including All Wages and Salaries: Make sure you report all income from your Form W-2.
- Not Reporting Self-Employment Income: If you are self-employed, you must report all income you earned, even if you didn’t receive a Form 1099-NEC.
- Not Including Other Sources of Income: Include any other sources of earned income, such as tips or royalties.
9.3 Not Meeting the AGI Limits:
The AGI limits for the EITC vary each year and depend on your filing status and the number of qualifying children you have. Make sure your A
