Are you eligible for the Earned Income Tax Credit?

The Earned Income Tax Credit (EITC) can significantly decrease your tax liability or increase your refund, based on your tax status and AGI, with specific income limits.

In 2024, CNBC Select will explain how the EITC works, how much it can save you, and who qualifies for it.

What is the Earned Income Tax Credit?

Eligible low- and middle-income workers can receive a tax break through the EITC, the amount of which is determined by income and the number of qualifying children in the household. Even if you don't have any children, you can still qualify for this tax break.

How much is the Earned Income Tax Credit?

The IRS has announced that for the income earned in 2023, you can claim up to $7,430, based on your filing status and qualifying children.

• If you don't have any children, you can claim up to $600. Your AGI can't exceed $17,640 if you're single or head of household, or $24,210 if you're married filing jointly.
• If you have one child, you can claim up to $3,995. For single or head-of-household filers, the AGI limit is $46,560, while for those married filing jointly, it is $53,120.
• If you have two children, the maximum EITC is $6,604. The maximum AGI for single filers or heads of household is $52,838. If you're married and filing jointly, that amount goes up to $59,478.
• Those with three or more children can receive up to $7,430 in tax credits. However, to qualify, your AGI must be below $56,838 (single or head of household) or $63,398 (married filing jointly).

If your investment income exceeds $11,000, you won't qualify for the EITC, regardless of your other income.

How to qualify for the Earned Income Tax Credit

To be eligible for the EITC, you must fulfill certain qualifications in addition to income limits.

• You are a U.S. citizen or resident alien with a valid Social Security number.
• To file separately while married, you and your spouse must either be legally separated and not living together at the end of the tax year or have lived apart during the last six months of the year.
• You haven't earned any income this tax year in a foreign country.
• Nobody is claiming you as a qualifying child on their tax return.
• Filing for the EITC with a spouse, at least one of you must be at least 25 years old but under 65 years old.

To claim credit for a child, they must adhere to specific guidelines.

• Your family members, including biological or adopted children, stepchildren, foster children, grandchildren, siblings, half-siblings, and stepsiblings (or their children), are related to you.
• To be eligible for certain benefits, the individuals must be under 19 years old at the end of the year and younger than the filer and their spouse if filing jointly. However, if the child is a full-time student, the age limit is 24.
• According to the IRS, if a child is permanently and totally disabled, there is no age limit to qualify.
• More than half a year, they resided with you or your spouse in the U.S.

Eligibility for EITC rules is different for military members, clergy, people with disability income, and children with disabilities. To determine if you and your family qualify, use the EITC Assistant to check your eligibility and estimate your credit.

How to claim the Earned Income Tax Credit

To receive the EITC, you must submit your annual tax return (Form 1040 or Form 1040-SR). If you're also claiming this tax credit for a qualifying child, you'll need to complete the Schedule EIC to provide the IRS with additional details.

Filing for the EITC is free when using tax software, such as TurboTax, which includes it in its free edition (according to TurboTax, about 37% of taxpayers are eligible).

Filing taxes can be a hassle, but with H&R Block's free online tax filing, you can claim your EITC and make the process easy and stress-free.

There are alternative ways to file taxes for free and claim the EITC, such as IRS Free File.

Why trust CNBC Select?

Our goal at CNBC Select is to deliver top-notch service journalism and in-depth consumer advice to our readers, enabling them to make well-informed decisions when it comes to their finances. Each of our tax guides is the result of thorough reporting by our team of expert writers and editors, who possess extensive knowledge of tax software products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content independently, without any input from our commercial team or external third parties. We uphold the highest journalistic standards and ethics in everything we do.

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