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 owning or running a business or farm.
EITC is one of the Largest Antipoverty Programs
- Nationwide during 2017, more than 25.8 million eligible workers and families received about $63.8 billion in EITC.1
- Four of five people eligible for the EITC claim it2
- EITC and the child tax credit (CTC), greatly reduce poverty for working families. These working family credits lifted an estimated 9.4 million people out of poverty, including 5 million or more than half of them children.2
- The cost of administering the EITC program ratio to claims paid is less than one percent3
1Source: Calendar Half Year Report, June 2017. Historically, half year data represents over 95 percent of EITC returns.
2 Source: The national EITC participation rate is 80% (TY2014), estimated in cooperation with the Census Bureau. A major break-through in the study of EITC Participation Rate was accomplished with the estimation of state level participation rates based on the American Community Survey (ACS). While the ACS data does not allow for as precise a determination of EITC eligibility as the Current Population Survey (CPS) data, the state estimates allow interested parties to observe differences in state level taxpayer participation rates. The official estimate is the CPS national estimate of 80% (TY2014), with the ACS estimates as supplementary source of information.
3Source: Chuck Marr, Chye-Ching Huang, Arloc Sherman and Brandon DeBot, CBPP-EITC and Child Tax Credit Promote Work, Reduce Poverty, and support children’s Development, Research finds, October 1, 2015
3Source: EITC administration cost ratio: proportion of EITC executed budget January, 2009
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 EITC Home Page on irs.gov IRS for more detailed information on who qualifies for EITC.
EITC Income Limits, Maximum Credit Amounts, and Tax Law 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 the 2017 tax year income limits and maximum credits here and find links to tax year 2018, 2016, 2015 and 2014 income limits, maximum credit amounts and tax law updates pages
- The tables showing the full range of EITC for different filing statuses and income amounts is shown in the Instruction booklets for the Form 1040 series and in Publication 596, Earned Income Credit. Publication 596 or Publication 596 SP, Crédito por Ingreso del Trabajo.
Who are we missing?
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 five who file and claim it. This includes workers who are:
- living in rural areas,
- receiving certain disability pensions or have children with disabilities,
- without a qualifying child,
- not proficient in English,
- grandparents raising their grandchildren, or
- recently divorced, unemployed, or experienced other changes to their marital, financial or parental status
More about EITC