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Earned Income Credit

how to qualify for the EARNED INCOME Tax CREDIT

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Earned Income Tax Credit: What is it & How to Qualify?

Are you working hard and struggling to make ends meet for your family? If so, the Earned Income Tax Credit, or EITC, can help. The EITC is a program designed to help working low-to-moderate-income families.
 
The benefits of the EITC can be used to lower the amount owed on taxes or increase your tax refund. This allows you to keep more of the money you earned to support yourself and your family. To qualify for the EITC, you need to meet the requirements set by the IRS and file a tax return.
 
Here are a few examples of the requirements but we go more in-depth in our article below:
 

It is important to note, the IRS may delay your tax refund if you claim the EITC. To avoid this potential delay, check your eligibility with a tax expert. Don’t miss out on putting more of your money back into your pockets.

What is the earned income tax credit (EITC/EIC)

Earned Income Credit is a tax credit for low to moderate-income workers.

The EIC credit is calculated based on your family’s earned income and how many qualifying children you have as well as your filing status.

Each qualifying child up to 3 increases the amount of the EIC you are eligible for.

So, you may be asking “How much for one child?” or “How much do you get back per child?”

This amount changes from year to year and there is a sweet spot for your earned income limits that allows you to claim the full credit.

The amount ranges from roughly $21,000 to $59,000 for married filing joint and $16,000 to $53,000 for all other filling statuses, and depending on the number of children claimed the credit goes up by totally different amounts.

To qualify for the maximum annual credit you need to not exceed the particular income limitation for that specific year.

2023 Earned Income Tax Credit Chart built by NARTRP

Earned Income Tax Credit Table(s) (EITC/EIC)

The maximum credit amounts in 2023:

No qualifying children: $600

1 qualifying child: $3,995

2 qualifying children: $6,604

3 or more qualifying children: $7,430

Investment income limit: $11,000 or less

Max AGI 2023:

Children or Relatives Filing as Single, Head of Household, 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

The maximum credit amounts in 2022:

No qualifying children: $560

1 qualifying child: $3,733

2 qualifying children: $6,164

3 or more qualifying children: $6,935

Max AGI 2022:

Children or Relatives Filing as Single, Head of Household, 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

The maximum credit amounts in 2021:

No qualifying children: $1,502

1 qualifying child: $3,618

2 qualifying children: $5,980

3 or more qualifying children: $6,728

Max AGI 2021:

Children or Relatives Filing as Single, Head of Household, or Widowed 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

The maximum credit amounts in 2020:

No qualifying children: $538

1 qualifying child: $3,584

2 qualifying children: $5,920

3 or more qualifying children: $6,660

Max AGI 2020:

Children or Relatives 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

The maximum credit amounts in 2019:

No qualifying children: $529

1 qualifying child: $3,526

2 qualifying children: $5,828

3 or more qualifying children: $6,557

Max AGI 2019:

Children or Relatives Filing as Single, Head of Household, or Widowed Filing as Married Filing Jointly
Zero
$15,570
$21,370
One
$41,094
$46,884
Two
$46,703
$52,493
Three
$50,162
$55,952

EIC is refundable, which means that even if you do not pay any taxes in during the year (i.e. zero) and you qualify for EIC, you can still get a big refund. In other words, you can get more back than you paid in. Lastly be careful about not filling jointly if you are married it can cause issues with trying to claim the EIC.

For further information please use the EITC tables provided by the IRS.

How Do I know If I Qualify For Earned Income Tax Credits

To qualify for the earned income credit, you must meet certain requirements related to your income (earned vs unearned), filing status (single, head of household, married filing jointly, married filed separately) and whether you have qualifying children.

Income requirements:

To qualify for the EIC, you must have earned income from wages, salaries, or self-employment. Your earned income and adjusted gross income (AGI) must be below certain amounts, which vary depending on your filing status and number of qualifying children. These amounts are updated each year for inflation.

Earned Income

Income that you worked for is considered earned, whether that be from an employer or if you are self employed, running a side hustle, or are considered a small business owner.

Unearned Income

Savings & Investments or Dividends

Filing status:

To qualify for the EIC, you must file a tax return, even if you are not required to do so based on your income level. You must also be a U.S. citizen or resident alien with a valid social security number or tax identification number for the entire tax year.

Qualifying children:

If you have qualifying children, you must meet additional requirements related to their relationship to you, age, and residence. A qualifying child must be your son, daughter, stepchild, foster child, brother, sister, half-brother, half-sister, stepbrother, stepsister, or a descendant of any of these individuals (for example, your grandchild). The child must also be under the age of 19 (or under the age of 24 if a full-time student) and must have lived with you for more than half the year.

Other requirements:

In addition to the above requirements, you must also meet certain rules related to your tax filing status, investment income, and student status. You may not be eligible for the EIC if you are claimed as a dependent on someone else’s tax return, if you have certain types of investment income, or if you are a full-time student.

It is important to note that these are just general guidelines and there may be additional requirements or restrictions that apply. You can find more detailed information about the EIC and its eligibility requirements on the IRS website or by speaking with a tax professional.

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