About EITC

The Earned Income Tax Credit (or EITC) is a credit for people who do not earn high incomes. EITC can reduce your taxes and result in a refund. In simple terms, workers keep more of what they earn.

EITC is One of the Largest Antipoverty Programs

  • 24 million claimed over $48 billion for tax year 2007
  • Participation is estimated at 75% to 80%
  • Five million people, half of them children, lifted out of poverty each year due to EITC

  • The cost of administering EITC program ratio to claims paid is less than one percent

Basic EITC Eligibility Requirements

Determining eligibility for EITC is complicated. You must make over 20 separate determinations. This tool kit presents the basic qualifiers.  Refer to the IRS website for more detailed information.

EITC Threshold, Limitations and Updates

Income and family size determine the amount of the EITC. The income amounts and the amount of EITC are adjusted for inflation each year.  See 2008 amounts here or refer to  income thresholds and limitations on the IRS website for additional years and information. The Earned Income Credit Table, which shows the credit amounts, is included in the Instruction booklets for the Form 1040 series and in Publication 596, Earned Income Credit.

Who are we missing?

IRS estimates that 20 to 25 percent of qualifying workers miss out on thousands of dollars every year because they fail to claim their EITC.  The IRS is trying reach potentially qualifying taxpayers to educate them about the credit and motivate them to file and claim it.  This includes workers who are: 

  • Living in rural areas
  • Self-employed
  • Disabled
  • Childless 
  • Not proficient in English
  • Older (grandparents)
  • Recently divorced, unemployed, or experienced other changes to their marital, financial or parental status