October 9, 2019
The earned income tax credit benefits working people with low-to-moderate income. Last year, the average credit was $2,445. EITC not only reduces the amount of tax someone owes, but may also give them a refund, even if they don’t owe any tax at all.
Here are a few things people should know about this credit:
- Taxpayers may move in and out of eligibility for the credit throughout the year. This may happen after major life events. Because of this, it’s a good idea for people to find out if they qualify.
- To qualify, people must meet certain requirements and file a federal tax return. They must file even if they don’t owe any tax or aren’t otherwise required to file.
- Taxpayers qualify based on their income, the number of children they have, and the filing status they use on their tax return. For a child to qualify, they must live with the taxpayer for more than six months of the year.
Here’s a quick look at the income limits for the different filing statuses. Those who work and earn less than these amounts may qualify.
Married filing jointly:
- Zero children: $21,370
- One child: $46,884
- Two children: $52,493
- Three or more children: $55,952
Head of household and single:
- Zero children: $15,570
- One child: $41,094
- Two children: $46,703
- Three or more children: $50,162
The maximum credit amounts are based on the number of children a taxpayer has. They are the same for all filing statuses:
- Zero children: $529
- One child: $3,526
- Two children: $5,828
- Three or more children: $6,557
Taxpayers who file using the status married filing separately cannot claim EITC.
Publication 5334, Do I Qualify for EITC?
January 27, 2018
The earned income tax credit provides a boost to workers, their families and the communities where they live. A tax credit usually means more money in the taxpayer’s pocket. Many qualified taxpayers don’t claim this credit simply because they don’t know about it. In fact, every year millions of people are newly eligible for EITC because their family or financial situation changed. Word of mouth is one way to spread information about this credit.
This credit can not only reduce the amount of taxes someone owes, it can also result in a refund. The amount of EITC taxpayers receive is based on their income, family size and filing status. The maximum amount of credit for Tax Year 2017 is:
- $6,318 with three or more qualifying children
- $5,616 with two qualifying children
- $3,400 with one qualifying child
- $510 with no qualifying children
The IRS encourages taxpayers who have claimed and benefitted from the EITC to help spread awareness about this important credit. Here are a few ways taxpayers can help their friends, family members and neighbors find out about EITC. Tell them about:
- IRS.gov: Taxpayers who want to learn more about EITC can go to IRS.gov/eitc. They can find information about who qualifies for the credit and how to claim it.
- Tax help in Foreign Languages: People can pass along information from IRS.gov about EITC in other languages:
- EITC Assistant: This tool on IRS.gov, available in English or Spanish, walks people through a series of questions to find out if they qualify.
- IRS on Social media: Share a link on Facebook or Twitter. People can follow the IRS on social media for the latest news and information about tax credits.
- Free Tax Help from Volunteers: The IRS works with community organizations around the country to train volunteers who prepare taxes for people with low and moderate income. These volunteers can help determine if a taxpayer is eligible to claim the EITC. There are two IRS-sponsored programs:
- Volunteer Income Tax Assistance: This program is also known as VITA. It offers free tax return preparation to eligible taxpayers who generally earn $54,000 or less.
- Tax Counseling for the Elderly: TCE is mainly for people age 60 or older, but offers service to all taxpayers. The program focuses on tax issues unique to seniors. AARP participates in the TCE program through AARP Tax-Aide.
By law, the IRS cannot issue refunds before mid-February for tax returns that claim the EITC or the additional child tax credit. The law requires the IRS to hold the entire refund — even the portion not associated with the EITC or ACTC. The IRS expects the earliest EITC/ACTC related refunds to be available in taxpayer bank accounts or on debit cards starting Feb. 27, 2018, if these taxpayers choose direct deposit and there are no other issues with their tax return.