The Basics

The Earned Income Tax Credit (EITC) is designed to help people with low income by lowering the amount of federal income tax they owe. Even if you don’t earn enough money to owe federal income taxes, you may be able to get an EITC as long as you had some earned income. Many people who qualify for the EITC don’t get it, because they don’t know they could.

If you qualify, you can claim your EITC when you file your annual federal tax return. For 2021 (filing by April 2022), the EITC ranges from $2 to $6,728, depending on your adjusted gross income and the number of qualifying children in your family.

To qualify, you must have income from employment, self-employment, nontaxable combat pay, or your employer’s disability retirement plan (until you reach retirement age). There is no limit to the number of times you can claim an EITC; you can claim it for every year that you are eligible.

Here we’ll explain the EITC in detail.

DB101 has been updated for tax changes in the 2021 American Rescue Plan (ARP) Act. For 2021 taxes (due in April, 2022), you could get a much higher Earned Income Tax Credit (EITC) or Child Tax Credit. Make sure you file your taxes, even if you don't owe anything, so that you get these credits.