What is the Earned Income Tax Credit (EITC)?

The Earned Income Tax Credit (EITC) may lower the taxes y'all owe and refund you upwards to $6,728 at tax time.

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The Earned Income Tax Credit (EITC) is a tax credit that may requite you money back at revenue enhancement time or lower the federal taxes you owe. You tin can claim the credit whether you're single or married, or have children or not. The principal requirement is that yous must earn money from a job.

The credit can eliminate whatsoever federal tax you owe at tax time. If the EITC amount is more than than what you owe in taxes, you become the money dorsum in your revenue enhancement refund. If you authorize for the credit, y'all can still receive a refund fifty-fifty if you lot do not owe income tax.

Beyond the federal EITC, 29 states and D.C. have adopted state EITCs. Check out the state EITC map to encounter if your state offers a tax credit.

How much can I get with the EITC?

The credit amount depends on your income, marital status, and family unit size. In 2021, the credit is worth up to $half dozen,728. The credit amount rises with earned income until information technology reaches a maximum amount, then gradually phases out. Families with more than children are eligible for higher credit amounts.

The Earned Income Taxation Credit in Tax Year 2021

Number of children: Unmarried workers with income less than: Married workers with income less than: EITC upwards to:
3 or more children $51,464 $57,414 $6,728
2 children $47,915 $53,865 $five,980
1 kid $42,158 $48,108 $3,618
No children $21,430 $27,380 $1,502

You cannot get the EITC if you have investment income of more than $x,000 in 2021. Investment income includes taxable interest, tax-exempt interest, and majuscule gain distributions.

Am I eligible for the EITC?

At that place are three primary criteria to merits the EITC:

  • Income: You need to piece of work and earn income. Your work doesn't accept to be twelvemonth-round. Your earnings cannot exist more than the amounts in the chart above, including investment income. Earned income tin exist from wages, salary, tips, employer-based inability, cocky-employment income, military pay, or union strike benefits.
  • Taxpayer Identification Number: You demand to accept Social Security numbers that permit piece of work for you, your spouse, and any children claimed for the EITC. You exercise not need to be a citizen to claim the EITC if you have a Social Security Number. Y'all cannot claim the federal EITC if you file your taxes with an ITIN. For more than information, please see Tax Filing with Immigrant or DACA Status .New: if yous alive in California, Colorado, Maine, Maryland, or New United mexican states, you may be eligible to go the state EITC with an ITIN.
  • Qualifying Child: If you lot claim children for the EITC, they must exist a "qualifying child". Run across below for details.

Boosted criteria for some people to claim the EITC:

  • Youmust be nineteen years of age and higher up if you are not claiming children
  • Youcannot file as married filing separately

Exceptions apply for both. See What'due south New about the EITC?  for details.

Does my child authorize for the EITC?

If you lot merits children as part of your EITC, they must pass three tests to exist a "qualifying child":

  1. Relationship: The child must be your son, daughter, grandchild, stepchild or adopted child; younger sibling, step-sibling, one-half-sibling, or their descendent; or a foster child placed with you past a government agency.
  2. Age: The child must be nether 19, under 24 if a full-time student, or any age if totally and permanently disabled.
  3. Residency: The kid must live with you in the U.S. for more than half the year. Time living together doesn't have to be consecutive.

How do I claim the EITC?

To merits the EITC, you must file a tax render. If you are challenge a child for the EITC, yous as well need to submit "Schedule EIC".

Going to a paid revenue enhancement preparer is expensive and reduces the corporeality of your tax refund. Luckily, in that location are free options available. You can visit a Volunteer Income Taxation Assistance (VITA) site or GetYourRefund.org to have IRS-certified volunteers accurately file your taxes for free. You can also visit MyFreeTaxes.com to file your own taxes for gratuitous online if you practice non have self-employment income.

Does my state accept an EITC?

Many states take their own version of the federal EITC that tin can add more money to your tax refund. Most states match a pct of your federal credit amount. Find out if your state has a state-level taxation credit.

What'south New About the EITC?

Under the 2021 American Rescue Plan, there are multiple temporary and permanent changes to the EITC.

Temporary Expansions to the EITC for Revenue enhancement Yr 2021 Only

There are two cardinal temporary EITC expansions.

  1. If You Have No Qualifying Children

You may authorize for the EITC if you are nineteen years old or older and non a student. There are two exceptions:

      • Workers who are 19-23 and were a full- or part-fourth dimension student for more than 5 months in 2021 practice non qualify.
      • Qualified homeless youth or former foster youth who are at to the lowest degree xviii years sometime and work are eligible even if they are a pupil.
  1. If Your 2021 Income is Lower Than Your 2019 Income

If your income in 2021 is less than your 2019 income, y'all can utilize your 2019 earned income to summate your EITC. Choose the year that gives you lot the bigger refund. If you are married filing jointly, the total earned 2019 income refers to the sum of each spouse'due south earned income in 2019.

Permanent Changes to the EITC

There are 4 major permanent changes to the EITC.

  1. If Your Qualifying Child Doesn't Accept a Social Security Number

You can claim the EITC for workers without children if you accept a qualifying child for the EITC who doesn't have a Social Security number.

  1. If You're Married Filing Separately

If you are married filing separately, yous may still qualify for the EITC if your qualifying child lives with yous for more than than six months of the year and you fulfill at least one of the post-obit requirements:

      • You and the qualifying child do non live with your spouse during the last six months of the taxable yr
      • You lot and your spouse have a decree, musical instrument, or understanding (besides a divorce decree) and do not live together

Note: Filing taxes as married filing separately may affect your eligibility for other tax benefits. Please consult a tax professional person if yous need assist determining your filing status.

  1. If You Take Investment Income

The maximum investment income allowed to claim the EITC is permanently increased to $10,000 from $iii,650.

  1. If You lot Live in a U.S. Commonwealth or Territory

Starting in 2021, individuals living in the post-obit U.S. Commonwealths and territories are allowed to claim the EITC:

      • Puerto Rico
      • U.Due south. Virgin Islands
      • Guam
      • The Commonwealth of the Northern Mariana Islands
      • American Samoa

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