EITC, the Earned Income Tax Credit, sometimes called EIC or Earned Income Credit is a refundable tax credit. Meaning, EITC can reduce the federal tax to zero and any unused credit is refunded. But, workers must file a tax return to get the credit even if their income is below the filing requirement. To qualify, workers must have taxable income from working for someone or from running a business or farm.
1Source: EITC Calendar Year Report, July 2014. Historically, half year data represents over 95 percent of EITC returns processed.
2Source: Policy Basics: Earned Income Tax Credit, Center on Budget and Policy Priorities, www.cbpp.org, January 31, 2014
3Source: Chuck Marr, Commentary: One Anti-Poverty Initiative Both Sides Can Agree On,www.cbpp.org, January 24, 2014
Determining eligibility for EITC is complicated. You must make over 20 separate determinations. This tool kit presents the basic qualifiers. Refer to the EITC Home Page on irs.gov IRS for more detailed information on who qualifies for EITC.
Income and family size determine the amount of the EITC. The income amounts and the amount of EITC are adjusted for inflation each year.
We estimate that four out of five workers claim the EITC they earned. Help IRS reach the potentially qualifying workers who miss out on thousands of dollars every year on EITC. Help us educate them about the credit and motivate them to join the four out of file who file and claim it. This includes workers who are: