What Is the Income Limit for Earned Income Tax Credit?

The income limit for Earned Income Tax Credit (EITC) varies depending on your filing status and the number of qualifying children you have; income-partners.net is here to assist you in determining your eligibility and maximizing your potential benefits. By understanding these limits, you can strategically plan and potentially increase your income through valuable partnership opportunities, leading to enhanced financial well-being. Partner with us to unlock your earning potential and navigate the path to financial success with our comprehensive resources and expert guidance.

1. Understanding the Earned Income Tax Credit (EITC)

The Earned Income Tax Credit (EITC) is a refundable tax credit in the United States for low- to moderate-income working individuals and families. The Earned Income Tax Credit (EITC) essentially reduces the amount of tax you owe and can provide a refund. Let’s dive into what the EITC is all about.

1.1. What is the Purpose of the EITC?

The EITC aims to supplement the income of working individuals and families, particularly those with children. According to the Center on Budget and Policy Priorities, the EITC is one of the nation’s most effective anti-poverty programs.

1.2. Who is Eligible for the EITC?

To be eligible for the EITC, you must:

Have earned income
Have a valid Social Security number
Meet certain adjusted gross income (AGI) and credit limits
Be a U.S. citizen or resident alien
Not be claimed as a dependent on someone else’s return
Not file as “married filing separately” (in most cases)

1.3. How Does the EITC Work?

The EITC is a refundable credit, meaning that if the credit amount is more than the amount of tax you owe, you’ll get the difference back as a refund. The amount of the credit depends on your income, filing status, and the number of qualifying children you have.

1.4. Key Terms Related to EITC

Understanding the key terms related to the EITC is crucial for determining eligibility and calculating the credit amount. Here are some essential terms:

Earned Income: Includes wages, salaries, tips, and net earnings from self-employment.
Adjusted Gross Income (AGI): Your gross income minus certain deductions, such as student loan interest and IRA contributions.
Qualifying Child: A child who meets specific age, residency, and relationship tests.
Filing Status: Such as single, married filing jointly, head of household, etc., which affects the income limits and credit amount.
Investment Income: Includes taxable and tax-exempt interest, dividends, capital gains, and certain other types of income.

1.5. The Impact of the EITC on Low-Income Families

The EITC can significantly impact low-income families by providing additional financial support. A study by the Brookings Institution found that the EITC encourages work, reduces poverty, and improves children’s outcomes.

2. Understanding Earned Income

To qualify for the Earned Income Tax Credit (EITC), you must have what qualifies as earned income. Here’s a comprehensive look at what counts as earned income and what doesn’t.

2.1. Definition of Earned Income

Earned income includes all the taxable income and wages you get from working for someone else, yourself, or from a business or farm you own. This is the cornerstone of EITC eligibility.

2.2. Types of Earned Income

Here’s a detailed breakdown of the types of income that qualify as earned income:

Wages, Salary, or Tips: This includes income where federal income taxes are withheld, as reported on Form W-2, box 1.
Gig Economy Work: Income from jobs where your employer didn’t withhold tax, such as:
- Driving for booked rides or deliveries
- Running errands or doing tasks
- Selling goods online
- Providing creative or professional services
- Providing other temporary, on-demand, or freelance work
Self-Employment Income: Money made from self-employment, including if you:
- Own or operate a business or farm
- Are a minister or member of a religious order
- Are a statutory employee and have income
Union Strike Benefits: Benefits received from a union strike.
Certain Disability Benefits: Benefits received before reaching the minimum retirement age.
Nontaxable Combat Pay: Reported on Form W-2, box 12 with code Q.

2.3. What Doesn’t Count as Earned Income?

It’s equally important to know what types of income do not qualify as earned income:

Pay for Work in Penal Institutions: Pay received for work done while an inmate in a penal institution.
Interest and Dividends: Income from investments.
Pensions or Annuities: Payments from retirement accounts.
Social Security: Social Security benefits.
Unemployment Benefits: Compensation received while unemployed.
Alimony: Payments received from a former spouse.
Child Support: Payments received for the support of a child.

2.4. Special Cases of Earned Income

Some situations require special attention to determine if income qualifies as earned income:

Self-Employment: If you’re self-employed, earned income is generally your net earnings from self-employment, which is your gross income minus business expenses.
Ministers and Religious Workers: Income for ministers and members of religious orders can qualify as earned income, even if it’s designated as a housing allowance.
Statutory Employees: Individuals classified as statutory employees may have specific rules regarding their earned income.

2.5. How to Calculate Your Earned Income

To calculate your earned income:

Gather all your income statements, such as W-2 forms and records of self-employment income.
Add up all wages, salaries, tips, and net earnings from self-employment.
Subtract any deductions or adjustments that are not related to earned income.

2.6. Resources for Clarification

If you’re unsure whether a particular type of income qualifies as earned income, consult the IRS guidelines or seek advice from a tax professional. The IRS provides detailed information on its website and in publications such as Publication 596, Earned Income Credit.

3. 2024 EITC Income Limits and Credit Amounts

Understanding the income limits for the Earned Income Tax Credit (EITC) is crucial for determining your eligibility. Here’s a detailed look at the income limits and maximum credit amounts for the tax year 2024.

3.1. Key Components of the 2024 EITC

For the tax year 2024, the EITC is determined by several factors, including your adjusted gross income (AGI), investment income, filing status, and the number of qualifying children you have. Let’s break down each component:

Adjusted Gross Income (AGI): This is your gross income minus certain deductions, such as student loan interest or IRA contributions.
Investment Income: This includes income from interest, dividends, capital gains, and other investments.
Filing Status: Your filing status (e.g., single, married filing jointly, head of household) affects the income limits.
Qualifying Children: The number of qualifying children you claim can significantly impact the amount of credit you receive.

3.2. 2024 AGI Limits

The maximum AGI limits for the tax year 2024 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

3.3. Investment Income Limit for 2024

For the tax year 2024, the investment income limit is $11,600 or less. If your investment income exceeds this amount, you are not eligible for the EITC.

3.4. Maximum Credit Amounts for 2024

The maximum EITC amounts for the tax year 2024 are:

No Qualifying Children: $632
1 Qualifying Child: $4,213
2 Qualifying Children: $6,960
3 or More Qualifying Children: $7,830

3.5. How to Determine Your EITC Amount

To determine your exact EITC amount, you’ll need to:

Calculate Your AGI: Start by calculating your adjusted gross income.
Determine Your Investment Income: Add up all your investment income for the year.
Identify Your Filing Status: Determine your filing status based on your marital status and other factors.
Count Your Qualifying Children: Count the number of qualifying children you can claim.
Use the EITC Tables: Refer to the EITC tables provided by the IRS to find the credit amount that corresponds to your AGI, filing status, and number of qualifying children.

3.6. Additional Resources for 2024 EITC

For more detailed information and updates on the 2024 EITC, refer to the following resources:

IRS Website: The official IRS website provides detailed information on the EITC, including eligibility requirements, income limits, and credit amounts.
IRS Publication 596: This publication provides a comprehensive guide to the Earned Income Credit, including worksheets and examples to help you calculate your credit amount.
Tax Professionals: Consult a qualified tax professional for personalized advice and assistance with claiming the EITC.

4. 2023 EITC Income Limits and Credit Amounts

Understanding the income limits for the Earned Income Tax Credit (EITC) is crucial for determining your eligibility. Let’s delve into the income limits and maximum credit amounts for the tax year 2023.

4.1. Overview of the 2023 EITC

For the tax year 2023, the EITC is determined by your adjusted gross income (AGI), investment income, filing status, and the number of qualifying children you have.

Adjusted Gross Income (AGI): Your gross income minus certain deductions.
Investment Income: Income from interest, dividends, and capital gains.
Filing Status: Your status (e.g., single, married filing jointly) affects income limits.
Qualifying Children: The number of qualifying children significantly impacts the credit amount.

4.2. 2023 AGI Limits

The maximum AGI limits for the tax year 2023 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

4.3. Investment Income Limit for 2023

For the tax year 2023, the investment income limit is $11,000 or less. If your investment income exceeds this, you are not eligible for the EITC.

4.4. Maximum Credit Amounts for 2023

The maximum EITC amounts for the tax year 2023 are:

No Qualifying Children: $600
1 Qualifying Child: $3,995
2 Qualifying Children: $6,604
3 or More Qualifying Children: $7,430

4.5. How to Calculate Your EITC Amount for 2023

To determine your EITC amount for 2023:

Calculate Your AGI: Determine your adjusted gross income.
Determine Your Investment Income: Calculate your total investment income.
Identify Your Filing Status: Choose the appropriate filing status.
Count Your Qualifying Children: Determine the number of qualifying children you can claim.
Use the EITC Tables: Refer to the EITC tables provided by the IRS to find your credit amount.

4.6. Resources for 2023 EITC

For detailed information on the 2023 EITC, consult the following resources:

IRS Website: The official IRS website provides detailed information on eligibility, income limits, and credit amounts.
IRS Publication 596: This publication offers a comprehensive guide, including worksheets and examples.
Tax Professionals: Consult a qualified tax professional for personalized advice and assistance.

5. 2022 EITC Income Limits and Credit Amounts

To accurately determine your eligibility, it’s important to understand the specific income limits for the Earned Income Tax Credit (EITC). Here’s a breakdown of the income limits and maximum credit amounts for the tax year 2022.

5.1. Key Aspects of the 2022 EITC

For the tax year 2022, eligibility for the EITC depends on several factors, including your adjusted gross income (AGI), investment income, filing status, and the number of qualifying children you have. Let’s explore these aspects:

Adjusted Gross Income (AGI): Your gross income minus certain deductions, such as student loan interest and IRA contributions.
Investment Income: Includes income from interest, dividends, capital gains, and other investments.
Filing Status: Your status (e.g., single, married filing jointly, head of household) affects the income limits.
Qualifying Children: The number of qualifying children you claim can significantly impact the amount of credit you receive.

5.2. 2022 AGI Limits

The maximum AGI limits for the tax year 2022 are 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

5.3. Investment Income Limit for 2022

For the tax year 2022, the investment income limit is $10,300 or less. If your investment income exceeds this amount, you are not eligible for the EITC.

5.4. Maximum Credit Amounts for 2022

The maximum EITC amounts for the tax year 2022 are:

No Qualifying Children: $560
1 Qualifying Child: $3,733
2 Qualifying Children: $6,164
3 or More Qualifying Children: $6,935

5.5. Calculating Your EITC Amount for 2022

To determine your EITC amount for 2022, follow these steps:

Calculate Your AGI: Start by calculating your adjusted gross income.
Determine Your Investment Income: Add up all your investment income for the year.
Identify Your Filing Status: Determine your filing status based on your marital status and other factors.
Count Your Qualifying Children: Count the number of qualifying children you can claim.
Use the EITC Tables: Refer to the EITC tables provided by the IRS to find the credit amount that corresponds to your AGI, filing status, and number of qualifying children.

5.6. Resources for 2022 EITC Information

For more detailed information and guidance on the 2022 EITC, consider the following resources:

IRS Website: The official IRS website provides extensive information on the EITC, including eligibility requirements, income limits, and credit amounts.
IRS Publication 596: This publication offers a comprehensive guide to the Earned Income Credit, including worksheets and examples to help you calculate your credit amount.
Tax Professionals: Consult with a qualified tax professional for personalized advice and assistance with claiming the EITC.

6. 2021 EITC Income Limits and Credit Amounts

Understanding the income limits for the Earned Income Tax Credit (EITC) is essential to determine if you qualify. Here’s a detailed look at the income limits and maximum credit amounts for the tax year 2021.

6.1. Understanding the 2021 EITC

For the tax year 2021, the EITC is determined by several factors, including your adjusted gross income (AGI), investment income, filing status, and the number of qualifying children you have.

Adjusted Gross Income (AGI): Your gross income minus certain deductions.
Investment Income: Income from interest, dividends, and capital gains.
Filing Status: Your status (e.g., single, married filing jointly) affects income limits.
Qualifying Children: The number of qualifying children significantly impacts the credit amount.

6.2. 2021 AGI Limits

The maximum AGI limits for the tax year 2021 are 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

*Taxpayers claiming the EITC who file married filing separately must meet the eligibility requirements under the special rule in the American Rescue Plan Act (ARPA) of 2021.

6.3. Investment Income Limit for 2021

For the tax year 2021, the investment income limit is $10,000 or less. If your investment income exceeds this, you are not eligible for the EITC.

6.4. Maximum Credit Amounts for 2021

The maximum EITC amounts for the tax year 2021 are:

No Qualifying Children: $1,502
1 Qualifying Child: $3,618
2 Qualifying Children: $5,980
3 or More Qualifying Children: $6,728

6.5. Determining Your EITC Amount for 2021

To determine your EITC amount for 2021:

Calculate Your AGI: Determine your adjusted gross income.
Determine Your Investment Income: Calculate your total investment income.
Identify Your Filing Status: Choose the appropriate filing status.
Count Your Qualifying Children: Determine the number of qualifying children you can claim.
Use the EITC Tables: Refer to the EITC tables provided by the IRS to find your credit amount.

6.6. Resources for 2021 EITC Information

For detailed information on the 2021 EITC, consult the following resources:

IRS Website: The official IRS website provides detailed information on eligibility, income limits, and credit amounts.
IRS Publication 596: This publication offers a comprehensive guide, including worksheets and examples.
Tax Professionals: Consult a qualified tax professional for personalized advice and assistance.

7. 2020 EITC Income Limits and Credit Amounts

Understanding the specific income thresholds is essential for determining your eligibility. Here’s a detailed overview of the income limits and maximum credit amounts for the tax year 2020.

7.1. Understanding the 2020 EITC

For the tax year 2020, the EITC is determined by several factors, including your adjusted gross income (AGI), investment income, filing status, and the number of qualifying children you have. Let’s break down each component:

Adjusted Gross Income (AGI): This is your gross income minus certain deductions, such as student loan interest or IRA contributions.
Investment Income: This includes income from interest, dividends, capital gains, and other investments.
Filing Status: Your filing status (e.g., single, married filing jointly, head of household) affects the income limits.
Qualifying Children: The number of qualifying children you claim can significantly impact the amount of credit you receive.

7.2. 2020 AGI Limits

The maximum AGI limits for the tax year 2020 are 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

7.3. Investment Income Limit for 2020

For the tax year 2020, the investment income limit is $3,650 or less. If your investment income exceeds this amount, you are not eligible for the EITC.

7.4. Maximum Credit Amounts for 2020

The maximum EITC amounts for the tax year 2020 are:

No Qualifying Children: $538
1 Qualifying Child: $3,584
2 Qualifying Children: $5,920
3 or More Qualifying Children: $6,660

7.5. Calculating Your EITC Amount for 2020

To determine your EITC amount for 2020, follow these steps:

Calculate Your AGI: Start by calculating your adjusted gross income.
Determine Your Investment Income: Add up all your investment income for the year.
Identify Your Filing Status: Determine your filing status based on your marital status and other factors.
Count Your Qualifying Children: Count the number of qualifying children you can claim.
Use the EITC Tables: Refer to the EITC tables provided by the IRS to find the credit amount that corresponds to your AGI, filing status, and number of qualifying children.

7.6. Additional Resources for the 2020 EITC

For more detailed information and updates on the 2020 EITC, refer to the following resources:

IRS Website: The official IRS website provides detailed information on the EITC, including eligibility requirements, income limits, and credit amounts.
IRS Publication 596: This publication provides a comprehensive guide to the Earned Income Credit, including worksheets and examples to help you calculate your credit amount.
Tax Professionals: Consult a qualified tax professional for personalized advice and assistance with claiming the EITC.

8. Other Tax Credits You May Qualify For

If you qualify for the Earned Income Tax Credit (EITC), you might also be eligible for other tax credits, which can further reduce your tax liability and increase your refund. Here are some other credits you may want to explore.

8.1. Child Tax Credit (CTC)

The Child Tax Credit is for taxpayers who have qualifying children. For 2023, the maximum Child Tax Credit is $2,000 per child.

Eligibility Requirements:

The child must be under age 17 at the end of the year.
The child must be your son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of any of them.
The child must be a U.S. citizen, U.S. national, or U.S. resident alien.
The child must have a Social Security number.
The child must be claimed as a dependent on your return.

8.2. Child and Dependent Care Credit

This credit is for taxpayers who pay someone to care for their qualifying child or other qualifying person so they can work or look for work.

Eligibility Requirements:

You must have paid expenses to allow you to work or look for work.
The care must be for a qualifying child under age 13 or a spouse or dependent who is physically or mentally incapable of self-care.
You must identify the care provider on your tax return.

8.3. American Opportunity Tax Credit (AOTC)

The American Opportunity Tax Credit is for qualified education expenses paid for an eligible student for the first four years of higher education.

Eligibility Requirements:

The student must be pursuing a degree or other credential.
The student must be enrolled at least half-time for at least one academic period that begins during the year.
The student must not have completed the first four years of higher education.
The student must not have claimed the AOTC or former Hope Credit for more than four tax years.
The student must not have a felony drug conviction.

8.4. Lifetime Learning Credit (LLC)

The Lifetime Learning Credit is for qualified tuition and other expenses for courses taken to acquire job skills.

Eligibility Requirements:

The student must be taking courses at an eligible educational institution.
The courses must be to acquire job skills.
There is no limit to the number of years you can claim the LLC.

8.5. Saver’s Credit (Retirement Savings Contributions Credit)

The Saver’s Credit is for low- to moderate-income taxpayers who contribute to a retirement account.

Eligibility Requirements:

You must be age 18 or older and not a student.
You cannot be claimed as a dependent on someone else’s return.
Your adjusted gross income (AGI) must be below a certain amount.

8.6. Adoption Credit

This credit is for expenses paid to adopt an eligible child.

Eligibility Requirements:

The child must be under age 18 or be physically or mentally incapable of self-care.
The expenses must be reasonable and necessary adoption expenses.

8.7. Energy Credits

There are several energy credits available for taxpayers who make energy-efficient improvements to their homes. These include the Residential Clean Energy Credit and the Energy Efficient Home Improvement Credit.

8.8. How to Determine Your Eligibility for Other Credits

To determine your eligibility for these and other tax credits, consult the IRS website or a qualified tax professional. The IRS provides detailed information on each credit, including eligibility requirements, income limits, and credit amounts.

9. Maximizing Your EITC Through Strategic Partnerships

Strategic partnerships can be a game-changer when it comes to maximizing your income and, consequently, your eligibility for the Earned Income Tax Credit (EITC). Here’s how you can leverage partnerships to boost your earnings and take full advantage of the EITC.

9.1. Understanding the Connection Between Partnerships and EITC

The EITC is designed to benefit low- to moderate-income working individuals and families. By strategically partnering with other businesses or individuals, you can increase your earned income, potentially qualifying for a higher EITC amount.

9.2. Types of Strategic Partnerships to Consider

Joint Ventures: Collaborating with another business on a specific project or venture can pool resources and expertise, leading to increased profits.
Affiliate Marketing: Partnering with businesses to promote their products or services in exchange for a commission can generate additional income streams.
Freelance Collaborations: Teaming up with other freelancers on projects can allow you to take on larger, more lucrative assignments.
Small Business Alliances: Forming alliances with other small businesses can create synergy and expand your market reach.
Referral Partnerships: Establishing referral agreements with other businesses can provide a steady stream of new clients or customers.

9.3. Case Studies of Successful Partnerships

Tech Startup and Marketing Firm: A tech startup partners with a marketing firm to launch a new product, resulting in increased sales and revenue for both companies.
Freelance Writer and Graphic Designer: A freelance writer teams up with a graphic designer to offer comprehensive content creation services, attracting higher-paying clients.
Local Restaurant and Catering Service: A local restaurant partners with a catering service to expand their reach to events and parties, increasing their overall income.

9.4. Tips for Forming Successful Partnerships

Identify Complementary Skills and Resources: Look for partners who bring skills and resources that complement your own.
Establish Clear Roles and Responsibilities: Define each partner’s role and responsibilities to avoid confusion and conflicts.
Set Measurable Goals and Objectives: Establish specific, measurable, achievable, relevant, and time-bound (SMART) goals to track progress and ensure accountability.
Create a Written Agreement: Formalize the partnership with a written agreement that outlines the terms and conditions, including profit-sharing arrangements.
Maintain Open Communication: Foster open and honest communication to address issues and ensure that both partners are aligned.

9.5. Resources for Finding Partnership Opportunities

Industry Associations: Joining industry associations can provide networking opportunities and access to potential partners.
Online Business Communities: Participating in online business communities can connect you with like-minded individuals and businesses.
Networking Events: Attending networking events can help you meet potential partners face-to-face and explore collaboration opportunities.
income-partners.net: Utilizing platforms like income-partners.net can help you find strategic partners and explore new business opportunities.

9.6. Legal and Financial Considerations

Before entering into any partnership agreement, consult with legal and financial professionals to ensure that the arrangement is in your best interest and complies with all applicable laws and regulations.

10. Common Mistakes to Avoid When Claiming the EITC

Claiming the Earned Income Tax Credit (EITC) can provide significant financial relief, but it’s essential to avoid common mistakes that can lead to delays, denials, or even penalties. Here’s a rundown of frequent errors and how to steer clear of them.

10.1. Misunderstanding Eligibility Requirements

One of the most common mistakes is misunderstanding the eligibility requirements for the EITC. It’s crucial to ensure that you meet all the criteria, including income limits, filing status, and qualifying child rules.

10.2. Incorrectly Calculating Earned Income

Accurately calculating your earned income is vital for determining your EITC amount. Make sure to include all sources of earned income, such as wages, salaries, tips, and net earnings from self-employment.

10.3. Failing to Meet the Qualifying Child Rules

If you’re claiming the EITC with a qualifying child, you must meet specific requirements related to the child’s age, relationship, residency, and dependency. Failing to meet these rules can result in denial of the credit.

10.4. Overlooking Investment Income Limits

The EITC has limits on the amount of investment income you can have and still qualify for the credit. Be sure to include all investment income, such as interest, dividends, and capital gains, when determining your eligibility.

10.5. Using the Wrong Filing Status

Your filing status can significantly impact your EITC eligibility and credit amount. Choose the correct filing status based on your marital status and other factors.

10.6. Not Providing Required Documentation

When claiming the EITC, you may need to provide documentation to support your claim, such as W-2 forms, Social Security cards, and proof of residency. Make sure to gather all necessary documents before filing your tax return.

10.7. Relying on Inaccurate Information

Relying on inaccurate or outdated information can lead to mistakes when claiming the EITC. Always consult official sources, such as the IRS website or publications, for the most up-to-date information.

10.8. Ignoring Changes in Tax Laws

Tax laws can change from year to year, so it’s essential to stay informed about any updates that may affect your EITC eligibility or credit amount.

10.9. Seeking Professional Assistance

If you’re unsure about any aspect of claiming the EITC, consider seeking assistance from a qualified tax professional. They can help you navigate the complexities of the tax code and ensure that you’re claiming the credit correctly.

10.10. Resources for Avoiding EITC Mistakes

IRS Website: The official IRS website provides detailed information on the EITC, including eligibility requirements, income limits, and common mistakes to avoid.
IRS Publication 596: This publication offers a comprehensive guide to the Earned Income Credit, including worksheets and examples to help you calculate your credit amount.
Tax Professionals: Consult with a qualified tax professional for personalized advice and assistance with claiming the EITC.

FAQ: Earned Income Tax Credit

1. What is the Earned Income Tax Credit (EITC)?

The Earned Income Tax Credit (EITC) is a refundable tax credit in the United States for low- to moderate-income working individuals and families. It reduces the amount of tax you owe and can provide a refund.

2. Who is eligible for the EITC?

To be eligible, you must have earned income, a valid Social Security number, meet certain AGI and credit limits, and be a U.S. citizen or resident alien. You also cannot be claimed as a dependent on someone else’s return or file as “married filing separately” in most cases.

3. What types of income qualify as earned income?

Earned income includes wages, salaries, tips, net earnings from self-employment, union strike benefits, certain disability benefits, and nontaxable combat pay.

4. What does not count as earned income?

Income that does not qualify as earned income includes pay for work done in penal institutions, interest and dividends, pensions or annuities, Social Security benefits, unemployment benefits, alimony, and child support.

5. How does having qualifying children affect the EITC?

Having qualifying children can significantly increase the amount of the EITC you receive. The maximum credit amounts vary depending on the number of qualifying