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Learn about the Earned Income Tax Credit

What is the Earned Income Tax Credit aka EIC aka EITC?

The IRS Earned Income Tax Credit ( EITC or EIC ) is a refundable tax credit for low to moderate-income working individuals and couples, particularly those with children. The amount of EIC benefit depends on a recipient’s income and number of children. A tax credit means more money in your pocket. It reduces the amount of tax you owe and may also give you a refund.

Who can claim the credit and if I qualify, how do I get it?

To claim EITC on your tax return, you must meet all the following rules:

  • You, your spouse (if you file a joint return), and all others listed on Schedule EIC, must have a Social Security number that is valid for employment.
  • You must have earned income from working for someone else or owning or running a farm or business.
  • Your filing status cannot be married filing separately.
  • You must be a U.S. citizen or resident alien all year.
  • You cannot be a qualifying child of another person.
  • You must meet the earned income, AGI and investment income limits (income limits change each year). See Tax Season 2017 Earned Income Tax Credit Limits
  • And you must meet one of the following:
    • Have a qualifying child (see who is a qualifying child below)
    • If you do not have a qualifying child, you must:
      • be age 25 but under 65 at the end of the year,
      • live in the United States for more than half the year, and
      • not qualify as a dependent of another person.

If you qualify for EITC, you have to file a tax return with the IRS, even if you owe no tax or are not required to file.

What are the limitations of the Earned Income Tax Credit and how much must I make to qualify?

Tax Season 2017 EITC Income Limits, Maximum Credit Amounts

Income and AGI(adjusted gross income) Limits

Earned income and adjusted gross income (AGI) must each be less than:

If filing… Qualifying Children Claimed
Zero One Two Three or more
Single, Head of Household or Widowed $14,820 $39,131 $44,454 $47,747
Married Filing Jointly $20,330 $44,651 $49,974 $53,267

Investment Income Limit

Investment income must be $3,400 or less for the year.

Earned Income Tax Credit Maximum Credit Amounts

The maximum amount of credit for Tax Year 2016 is:

  • $6,242 with three or more qualifying children
  • $5,548 with two qualifying children
  • $3,359 with one qualifying child
  • $503 with no qualifying children

Source: irs.gov

 

Earned Income Tax Credit Maximum Credit Amounts, Limits, 2016 Tax Year, 2017 Tax Season, EITC Limits, EIC Information, Child Tax Credit 2017 details here.