Claiming the Earned Income Tax Credit (EITC)


The Earned Income Tax Credit (EITC) is a tax credit for people who work and whose earned income is within a certain range.

You must meet certain eligibility rules to claim and receive the credit. They include filing a tax return even if you generally don’t have to, having income within a certain range, your filing status, and whether you’re claiming a qualifying child. The amount of the credit also depends on these factors.

The PATH Act, Section 201 made the following changes to help prevent revenue loss due to identity theft and refund fraud related to fabricated wages and withholdings:

  • No credit or refund of an overpayment for a taxable year shall be made to a taxpayer before the 15th day of the second month following the close of such taxable year, if the taxpayer claims the Earned Income Tax Credit or Additional Child Tax Credit(ACTC) on the return. (starting Jan. 1, 2017)
  • This change only affects returns claiming EITC or ACTC that are filed before Feb. 15.
  • The IRS will hold the entire refund, including any part of the refund that is not associated with the EITC or ACTC.
  • Neither TAS, nor the IRS, can release any part of the refund before that date, even if you are experiencing a financial hardship based on the law.

NOTE: If you qualify for the EITC, you may also qualify for other refundable federal, state, and local tax credits, such as the Child Tax Credit or Education Tax Credits. Some states also offer a version of the EITC for state and local taxes.

Find out if you qualify

The easiest way to find out if you qualify is to use the IRS’s EITC Assistant Tool. The tool is available in English and Spanish. It will ask you questions about yourself and other family members to see if you qualify for the credit, and if so estimate the amount.

NOTE: When you look at the rules to qualify for EITC, be sure you have the information for the correct tax year —each tax year has different limits on your earned income.

Qualifications

About YOU

You and any other family members claimed, such as your spouse or qualifying child must have a valid Social Security number.

Your filing status cannot be “married filing separately.”

You must be a U.S. citizen or resident alien all year.

About YOUR MONEY

You must have earned income.

  • This includes:
    • Wages, salaries, tips and other taxable employee pay. Earned income must be taxable to be considered.
      • Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. However, if you’re in the military, there’s an exception for nontaxable combat pay, which you can include as earned income.
    • Net earnings from self-employment.
    • Gross income received as an independent contractor or statutory employee.
      • Certain employees who receive income for work performed as independent contractors may see Box 13 of their IRS Form W-2 checked as “Statutory employee.”
    • If you retire on disability, taxable benefits you receive under your employer’s disability retirement plan are considered earned income until you reach minimum retirement age.

Your adjusted gross income (AGI) and your investment income such as taxable interest, tax-exempt interest, dividends and capital gain distributions must be less than the threshold amount for that year.  The threshold changes based on your filing status and the number of qualifying children.

NOTE: Adjusted Gross Income is your gross, pre-tax income, minus any adjustments. It can be found on line 4 of IRS Form 1040EZ, line 22 of IRS Form 1040A, or line 38 of IRS Form 1040.

You cannot claim the EITC if you need to file IRS Form 2555, Foreign Earned Income, or IRS Form 2555-EZ, Foreign Earned Income Exclusion.

About YOUR FAMILY

If you are not claiming a child, you must meet all of these rules:

  • You must be at least age 25, but under 65.
  • You cannot be the dependent of another person.
  • You cannot be a qualifying child of another person.
  • You must have lived in the United States more than half of the year.

If you are claiming a child:

  • You cannot be a qualifying child of another person.
  • Your qualifying child cannot be used by more than one person to claim the EITC.
  • The child must pass relationship, age, residency, and joint return tests.

Relationship Test

The child must be related to you.

A number of different relationships qualify for EITC:

• Son or daughter, stepchild, foster child, or their descendants (grandchild or great-grandchild), or
• Full and half siblings or their descendants (niece or nephew), or
• Adopted child or qualifying foster child.

Age Test

The child must be:

• Under age 19 at the end of the year and younger than you (or your spouse, if filing jointly), or
• Under age 24 at the end of the year, a student, and younger than you (or your spouse, if filing jointly), or
• Permanently and totally disabled at any time during the year, regardless of age.

Residency Test

The child must have lived with you in the United States for more than half of the tax year. This doesn’t mean six months in a row (for example, if your child lives with you during the school year, but spends summers elsewhere).

Joint Return Test

The child cannot file a joint return for the year.  An exception to the joint return test applies if your child and his or her spouse file a joint return only to claim a refund of income tax withheld or estimated tax paid.

You may need to prove that you are entitled to the EITC, and provide documentation. (For more information, see How will this affect me?)

Special Rules

There are special EITC rules for members of the military, ministers, members of the clergy, those receiving disability benefits, and those impacted by disasters. If you fall into any of these categories, please visit the IRS Special EITC Rules page.

The PATH Act prevents you from filing retroactive returns or amended returns claiming EITC, ACTC, or AOTC if the reason you are filing is because you now have the type of valid TIN required for each credit but didn’t have such TIN before the due date of the return.

If for any reason you or one of your family members did not receive a valid “taxpayer identification number” by the due date of the tax return (including extensions) you cannot file a past due return or an amended return to claim any of these credits. A valid taxpayer identification number could be an SSN, ITIN, or ATIN depending on the requirement for each credit.

You cannot file a past due return or an amended return to claim the EITC for anyone on the return without an SSN that’s valid for employment by the due date of the return including a valid extension.

To claim the credit, file your tax return

To claim the credit, if eligible, you must file a tax return - whether you normally need to file or not.  You need to complete an IRS Form Schedule EIC, Earned Income Credit and file it with your return, if you are claiming a qualifying child.  If you do not have a qualifying child, you claim the credit on your tax return.  Directions on how to determine the credit are in the instructions for the following tax forms:  IRS Forms 1040, 1040A, and 1040EZ.

If you need free help preparing your taxes, type “Free Tax Prep” in the search box on www.IRS.gov and use the VITA (Volunteer Income Tax Assistance) locator tool to find a volunteer site near you. You can also prepare and e-file your own taxes with professional software using the IRS’s Free File program.

Documentation

The IRS may ask you to provide documents to show you are entitled to claim the credit. The notice you get will tell you what documents you need to send to claim the credit (birth certificates, school records, etc.).

Sometimes you may not have the specific types of documents requested by the IRS. IRS Form 886-H-EIC, Documents You Need to Send to Claim the Earned Income Tax Credit on the Basis of a Qualifying Child or Children, lists many options, but remember that different combinations may also be acceptable.

Let’s say the IRS wants medical records to show the child lived with you during the year in question, and you can’t get those or your child didn’t go to the doctor. There may be other records that show your child lived with you, such as social service records, child care provider records, or official mail addressed to the child. You may want to check to see if there’s an agency that has a record of your address and any additional information that shows the child lived with you. If so, it may be able to give you a signed letter on their official letterhead showing these details.

A certain document alone generally does not show you are entitled to receive the credit, but in combination with other records, it can demonstrate what the IRS needs.

NOTE: If you get school records to verify one or more of the tests, remember a school “year” really is just part of the calendar year. You’d need to ask for two school years to cover one calendar year. You might have to get the school to write a letter, rather than provide just the transcripts, to show the child’s guardian during the calendar year and the address on record during that time.

While the IRS is asking for additional information, it will hold your refund (credit).

Any refund you receive because of the EITC is not counted as income in determining whether you are eligible for federal or federally funded public benefits or assistance.

I haven’t gotten my refund of the EITC yet. Visit our I Don't Have My Refund page for possible reasons why a refund may be delayed and what to do about it.

I need face-to-face help to figure and claim the EITC. If you are eligible for EITC according to the basic income information above, you may also qualify for free tax return preparation assistance at a VITA site. There they can also help you determine what other credits you may be eligible for.

Have a different tax issue?  Browse common issues and situations at Get Help.

Is your tax problem more complex?  If your issue is causing you financial hardship, you have tried repeatedly and are not receiving a response from the IRS, or you feel your taxpayer rights are being violated, consider contacting Taxpayer Advocate Service (TAS).

Do you feel that you need help from a tax professional but can’t afford one? You may be eligible for representation from an attorney, certified public accountant (CPA), or enrolled agent associated with a Low Income Taxpayer Clinic.

Last modified May 22, 2017