The Earned Income Tax Credit or EITC is a refundable work credit that may give money back or lower federal tax liability for those who qualify. IRS Publication 596 gives details about eligibility requirements. The main requirement is that taxpayers have earned income. The credit can help eliminate any federal tax liability or even result in a tax refund when you file your tax return.
Who is eligible for EITC?
To qualify for EITC you:
Must have a Social Security number that is valid for employment
Must have earned income from wages or running a business or a farm
May have some investment income (Limit applies)
Generally must be a U.S. citizen or resident alien all year
Cannot file as married filing separately
Cannot be a qualifying child of another person
Cannot file Form 2555 or 2555-EZ (related to foreign earned income)
2021 - EITC income limits
For 2021, earned income and adjusted gross income (AGI) must each be less than:
$21,430 ($27,380 married filing jointly) with no qualifying children
$42,158 ($48,108 married filing jointly) with one qualifying child
$47,915 ($53,865 married filing jointly) with two qualifying children
$51,464 ($56,414 married filing jointly) with three or more qualifying children
Investment Income must be $10,000 or less for the year.
2020 - EITC income limits
For 2020, earned income and adjusted gross income (AGI) must each be less than:
$15,820 ($21,710 married filing jointly) with no qualifying children
$41,756 ($47,646 married filing jointly) with one qualifying child
$47,440 ($53,330 married filing jointly) with two qualifying children
$50,954 ($56,844 married filing jointly) with three or more qualifying children
Tax Year 2020 maximum credit:
$538with no qualifying children
$3,584 with one qualifying child
$5,920 with two qualifying children
$6,660 with three or more qualifying children
Investment income must be $3,650 or less for the year.
2019 – Earned Income Tax Credit
For 2019, earned income and adjusted gross income (AGI) must each be less than:
$15,570 ($21,370 married filing jointly) with no qualifying children
$41,094 ($46,884 married filing jointly) with one qualifying child
$46,703 ($52,493 married filing jointly) with two qualifying children
$50,162 ($55,952 married filing jointly) with three or more qualifying children
Tax Year 2019 maximum credit:
$529 with no qualifying children
$3,526 with one qualifying child
$5,828 with two qualifying children
$6,557 with three or more qualifying children
Investment income must be $3,600 or less for the year.
2018 – Earned Income Tax Credit
For 2018, earned income and adjusted gross income (AGI) must each be less than:
$15,270 ($20,950 married filing jointly) with no qualifying children
$40,320 ($46,010 married filing jointly) with one qualifying child
$45,802 ($51,492 married filing jointly) with two qualifying children
$49,194 ($54,884 married filing jointly) with three or more qualifying children
Tax Year 2018 maximum credit:
$519 with no qualifying children
$3,461 with one qualifying child
$5,716 with two qualifying children
$6,431 with three or more qualifying children
Investment income must be $3,500 or less for the year.
If you claim the earned income tax credit, your refund may be delayed. By law, the IRS must wait until mid-February to issue refunds to taxpayers who claim the EITC.
Still not sure if you qualify for the EITC? Contact your tax professional at H&S Accounting & Tax Services for assistance claiming the credit, estimating your tax refund, and preparing your tax return.
