Earned Income Credit (EIC)

What is Earned Income Credit (EIC)? 

The Earned Income Credit (EIC), also known as the Earned Income Tax Credit (EITC), is a tax benefit designed to support workers and families with low to moderate-income.  

It is a refundable tax credit that helps reduce the tax burden on low- and moderate-income of working people and families. Unlike a deduction that lowers taxable income, a refundable credit like the EIC can result in a refund if the credit exceeds the amount of taxes due. This means that a refund may be received even if there is little to no tax liability 

Who qualifies for Earned Income Credit (EIC)? 

To qualify for the EIC, individuals must meet the following criteria: 

General Eligibility Requirements

• Applicants must earn income through wages, salaries, self-employment, or disability benefits. 

• The total investment income must be below the IRS-specified threshold. 

• Valid Social Security number (SSN) 

• Individuals must be U.S. citizens or resident aliens for the entire tax year. 

• Those filing Form 2555 (Foreign Earned Income) are ineligible. 

• Special rules apply for individuals who are married but not filing jointly due to separation. 

Special Eligibility Rules

The EIC includes special considerations for: 

• Military personnel 

• Clergy members 

• Taxpayers and their relatives with disabilities 

• Special Eligibility Rules 

• Certain groups may have additional considerations for EIC eligibility: 

Social Security Number (SSN) Requirements

To claim the EIC, the taxpayer, spouse (if filing jointly), and any qualifying children must have a valid SSN: 

• Must be valid for employment (may state “Valid for work with DHS authorization”). 

• Must have been issued on or before the tax return due date (including extensions). 

Eligible Filing Statuses for EIC

The following filing statuses may qualify for the EIC: 

• Married Filing Jointly 

• Head of Household 

• Qualifying Surviving Spouse 

• Single 

• Married Filing Separately (with restrictions) 

• Special Considerations for Certain Filing Statuses 

Claiming the EIC Without a Qualifying Child

Individuals without qualifying children may still be eligible for the EIC if they meet all of the following conditions: 

• Satisfy the general EIC eligibility requirements. 

• Maintain their primary residence in the U.S. for more than half the year. 

• Cannot be claimed as dependent on another taxpayer’s return. 

• Are between 25 and 65 years old (at least one spouse must meet the age rule if filing jointly). 

Exceptions and Special Situations

• Temporary absences: A qualifying child is still considered to have lived with you if they were away for school, military service, or medical care. 

• Children born or deceased during the tax year: Special rules apply to children who were born or passed away within the tax year. 

• Kidnapped children: IRS guidelines may allow continued eligibility in cases where a child has been kidnapped. 

EIC Rates for 2024

The maximum amount of credit EIC offers are:  

• No qualifying children: $632  

• 1 qualifying child: $4,213  

• 2 qualifying children: $6,960  

• 3 or more qualifying children: $7,830