Earned Income Tax Credit (EITC)

The Earned Income Tax Credit (EITC) is a federal tax credit for low-income workers that can reduce their tax liability or provide a refund, helping families keep more of what they earn.

Who is eligible for the EITC?

To qualify for the EITC, you must have earned income and fall within certain income limits, which vary based on your filing status and number of children. Some types of income, like imputed income, can affect eligibility. You will need to file a tax return to claim the credit.

How does the EITC benefit low to moderate-income workers?

The EITC lowers your tax bill dollar for dollar. If you don't owe taxes, you get the full credit as cash back. The amount you get depends on your income and family size, with larger families receiving bigger credits.

What income limits apply to EITC eligibility?

The IRS adjusts EITC income limits annually based on factors such as inflation and taxable wages.Income limits differ for single filers and married couples. Families with children receive a larger credit, while single filers receive a smaller amount.

How is the EITC claimed on tax returns?

You must file a tax return to claim the EITC, even if you owe no taxes. Since it’s a refundable credit, you can receive a refund even if your tax liability is zero.

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.