What is an Earned Income Tax Credit & Do You Qualify for It?

The Earned Income Tax Credit (EITC) is the country’s largest program for working people with low to moderate incomes. With this refundable tax credit, taxpayers can receive a substantial amount of money in refunds after they file their tax return, even if they didn’t owe any tax. For many, the EITC is a critical tax benefit that helps lift them out of poverty. 

If you qualify, make sure not to miss out on this tax benefit. For a family with three or more children, this tax credit is worth up to $7,830 for the 2024 tax year and $8,046 for the 2025 tax year. 

If you think you might be eligible for an Earned Income Tax Credit refund this year, this guide will help you understand this tax credit and how to claim it.

Key takeaways

• The EITC is worth a maximum of $7,830 in 2024 and $8,046 in 2025 for those with three or more qualifying children.
• You do not have to have children to claim the EITC if you meet the other requirements.
• If you realize you’re eligible for the EITC after filing your return, you can amend your return by filing Form 1040-X within three years from the due date of the original return.

What is the Earned Income Tax Credit (EITC)?

The EITC is a refundable tax credit given to taxpayers who earn a low to moderate income from a job or from being self-employed.

This credit may not only eliminate the taxes you owe, but you may also receive a tax refund if the credit is more than the amount of taxes you owe, since the EITC is a refundable credit.

Benefits of the EITC

The EITC is considered an anti-poverty program that provides cash benefits to low-income taxpayers. This credit is especially beneficial to low to moderate-income taxpayers as it can reduce your tax liability to zero and potentially result in a substantial refund. 

According to the IRS, about 23 million eligible filers received the EITC as of December 2023, and the average EITC was approximately $2,743.

How does the EITC work?

The EITC is based on earnings. If your income is above the threshold based on the number of qualifying children you have, you won’t be eligible to receive the credit.

The amount of your EITC credit depends on your:

• Income
• Marital status
• Number of children

Who is eligible to claim the Earned Income Tax Credit?

Generally speaking, you may be eligible for the EITC if you meet the income limits included below and all of the following apply:

• You’re a U.S. citizen or resident alien who was in the U.S. at least 6 months of the year you’re filing for
• Have a valid Social Security number (not an ITIN) for yourself, your spouse, and any qualifying children (if applicable) by the due date of your tax year 2024 return (including extensions) 
• Must meet certain requirements if you’re separated from your spouse and not filing a joint return 
• You have earned income from employment or self-employment. Unemployment income doesn’t count.
• You can’t file Form 2555 (relating to foreign earned income)

While you can have interest, dividends, and other investment earnings, your investment income must be $11,600 or less in 2024 and $11,950 or less in 2025. But most importantly, you have to file your federal taxes in order to claim this valuable credit.

What are the income limits?

The limits are adjusted each year, and for tax year 2024, your earned income and adjusted gross income must be no more than: 

• $59,899 ($66,819 married filing jointly) with three or more qualifying children
• $55,768 ($62,688 married filing jointly) with two qualifying children
• $49,084 ($56,004 married filing jointly) with one qualifying child
• $18,591 ($25,511 married filing jointly) with no qualifying children

For tax year 2025, your earned income and adjusted gross income must be no more than:

• $61,555 ($68,675 married filing jointly) with three or more qualifying children
• $57,310 ($64,430 married filing jointly) with two qualifying children
• $50,434 ($57,554 married filing jointly) with one qualifying child
• $19,104 ($26,214 married filing jointly) with no qualifying children

How much does the Earned Income Tax Credit pay?

Your income and number of qualifying children will determine the actual amount of your credit. 

For tax year 2024, the maximum credits are as follows:

• $7,830 with three or more qualifying children
• $6,960 with two qualifying children
• $4,213 with one qualifying child
• $632 with no qualifying children

For tax year 2025, the maximum credits are as follows:

• $8,046 with three or more qualifying children
• $7,152 with two qualifying children
• $4,328 with one qualifying child
• $649 with no qualifying children

What is a qualifying child?

A child qualifies if he/she meets four tests for age, relationship, residency, and joint return as follows:

1. Age

Generally, your child must be under 19, under 24 if they are a full-time student, or any age if permanently and totally disabled.

2. Relationship

Your child must be either your son, daughter, foster child, or stepchild (including all of their respective children). Your “qualifying child” can also be your brother, sister, half-brother, half-sister, step-sister, or step-brother (including all of their respective children).

3. Residency

Your child must have lived with you in the U.S. for more than half the year.

4. Joint return

Generally, your child must not have filed a joint return with their spouse. If they did file a joint return, it should only be for a tax refund on tax withheld from their paycheck.

Federal vs. state credits

In addition to the federal EITC, 31 states, plus the District of Columbia and Puerto Rico, have their own version of this credit that provides additional benefits to resident taxpayers. 

If you meet the requirements, you can claim both the federal and state EITC to get more money back when you file.

For state tax credits, it’s important to note that each state sets its own requirements and credit amounts. If you’re unsure whether your state has an EITC, check with your state tax authority or consult a tax professional for help preparing your return.

How do I claim the EITC tax credit?

You’ll claim the EITC credit on your federal tax return with Form 1040. 

If you have a qualifying child, you also need to submit Schedule EIC. This form allows you to provide information about your children.

If you’ve determined that you were eligible for the EITC after submitting your tax refund, you can amend your return. Use Form 1040-X to make updates and claim the EITC so you don’t miss out on this refundable credit that can reduce your tax bill and put money in your pocket.

When can I expect to receive my refund if it includes EITC?

The IRS began accepting and processing tax returns on January 27, 2025, for the 2024 tax year. Most refunds are issued within 21 days or less of acceptance; however, under the Protecting Americans from Tax Hikes (PATH) Act, signed into law in December 2015, the IRS cannot issue refunds that include certain credits, including the Earned Income Tax Credit (EITC) before mid-February. 

The PATH Act is intended to help detect and prevent tax fraud. The extended refund release also gives the IRS more time to ensure taxpayers are properly claiming the credits, so they get the refund they are owed.

The IRS encourages you to file as soon as possible so you can get closer to your tax refund!

What if I haven’t filed my taxes for a couple of years and may be eligible for EITC for prior years?

If you haven’t filed your taxes for a few years, you have three years from the filing deadline to file your tax return for a tax refund or to claim a credit like the Earned Income Tax Credit. So, if you didn’t file your 2023 taxes, you would have until April 15, 2027, to file and claim the EITC. 

The IRS reports close to one billion dollars in unclaimed tax refunds every year. Many taxpayers are surprised to find that some of this money belongs to them in the form of an Earned Income Tax Credit when they file previous years’ returns. 

Prior-year returns have to be mailed instead of e-filed, but TurboTax has previous years’ tax products, so you can file those older tax returns. If you filed a tax return already, but didn’t claim the EITC and you were eligible, you will need to file an amended return for that year. 

Don’t worry about knowing the EITC tax rules when you file your taxes. TurboTax will ask you simple questions about you and your family and will calculate the tax credit if you’re eligible based on your answers. No matter what moves you made last year, TurboTax will make them count on your taxes. Whether you want to do your taxes yourself or have a TurboTax expert file for you, we’ll make sure you get every dollar you deserve and your biggest possible refund – guaranteed.