The Earned Income Tax Credit, usually called the EITC, is a federal tax credit for people who work and earn below a certain income threshold. Unlike a tax deduction, which reduces the amount of income you are taxed on, a tax credit reduces your actual tax bill dollar for dollar. The EITC is also refundable, meaning if the credit is larger than what you owe in taxes, you get the difference back as a refund. For many working families it is one of the most significant financial transfers available to them.
How much is it worth
The credit amount depends on your income, filing status, and how many qualifying children you have. For tax year 2024, the maximum credit ranges from around $632 for a worker with no children to $7,830 for a family with three or more children. These are meaningful amounts. For a family that qualifies for the maximum credit, the EITC can be larger than their entire federal income tax bill for the year. The IRS estimates that about 20 percent of eligible workers do not claim the credit each year.
Who qualifies
To claim the EITC you must have earned income from a job or self-employment, have income below the limit for your filing status, have a valid Social Security number, and not file as married filing separately. For 2024, the income limits run from around $18,600 for a single filer with no children up to around $66,819 for a married couple filing jointly with three or more children. Investment income above a set threshold disqualifies you. You do not need to have children to qualify, though the credit is larger for those who do.
Self-employment and the EITC
Self-employed workers, freelancers, and gig workers can claim the EITC on their net self-employment income after deducting business expenses. This is an area where people sometimes miss the credit because they assume it only applies to traditional employment. If you drove for a rideshare company, sold things online, did freelance work, or ran any kind of small business and your net income falls within the qualifying range, you are likely eligible.
How to claim it
The EITC is claimed on your annual federal tax return using Schedule EIC if you have qualifying children, or directly on Form 1040 if you have no children. If you use tax software, it will typically prompt you to check your EITC eligibility automatically. If you do your taxes by hand or use a preparer, make sure to specifically mention that you want to check EITC eligibility. The IRS also has a free EITC Assistant tool on its website where you can check whether you qualify based on your specific situation.
Free help claiming it
The Volunteer Income Tax Assistance program (VITA) offers free tax preparation from IRS-certified volunteers for households earning around $67,000 or less per year. VITA sites specifically check for the EITC and other credits that are commonly missed. To find a site near you, call 211 or search the IRS VITA locator online. There is no cost and the preparers are trained specifically on the credits that working households are most likely to miss.