What is the Earned Income Tax Credit (EITC)?

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

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

The program is also called the Earned Income Credit (EIC).

How often can I claim an Earned Income Tax Credit (EITC)?

You can claim an Earned Income Tax Credit (EITC) every year that you qualify.

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

To be eligible for the Earned Income Tax Credit (EITC), you must:

  • Have earned income from employment, self-employment, or employer-paid disability benefits that you got prior to retirement
  • Meet adjusted gross income requirements
  • Have a Social Security Number valid for employment
  • File a joint tax return if you are married
  • Be a U.S. citizen or resident alien. If you’re a nonresident alien, 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 is above $3,500 for tax year 2018
  • Be the dependent of another person
  • Be the qualifying child of another person

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

Yes. Money you get from an Earned Income Tax Credit (EITC) can be deposited into an IDA and matched, or you can set the money aside in a PASS. These are 2 ways to achieve work or savings goals more quickly.

How do I claim an Earned Income Tax Credit (EITC)?

If you are eligible, you can claim an Earned Income Tax Credit (EITC) while filing your annual federal tax return, IRS Form 1040. If you have a qualifying child, you will need to attach a Schedule EIC.

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

While there are no asset requirements to claim the Earned Income Tax Credit (EITC), you cannot have investment income that is above $3,500 for tax year 2018 (filing by April 2019).

How do I know how much my Earned Income Tax Credit (EITC) is worth?

The value of your Earned Income Tax Credit (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. 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.

To estimate the value of your EITC, use the Center on Budget and Policy Priorities Tax Credit Estimator.

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

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

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

Yes. To qualify for the Earned Income Tax Credit (EITC), 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 you’re a nonresident alien, 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”?

To be a qualifying child under the Earned Income Tax Credit (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, for 6 months or longer each year, the child must live at the same house as you do and the child must 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.