What is Earned Income Tax Credit (EITC)
The Earned Income Tax Credit or EITC is a benefit for working people with low to moderate income. To qualify, you must meet certain requirements. You must also file a tax return even if you don’t owe any taxes or are not required to file. The EITC reduces the taxes you owe and may even give you a refund.
IRS EITC Overview
EITC Eligibility
If you’re eligible for the EITC, you may receive up to $7,430 depending on certain eligibility criteria like your income, filing status, and dependents.
It’s important to note that you should check your EITC eligibility status every year as requirements change. Also, the EITC increases, plateaus, and then begins to phase out as you earn more income. At a certain income level, you won’t be eligible for it at all.
To find out if you’re eligible, use the IRS’s free Earned Income Tax Credit (EITC) Assistant. This tool allows you to get your eligibility results online in just 5 steps.
Note: This article was originally written by Linda Jacob two years ago. It was updated by Jerry Zeigler in December 2021. Zeigler is a Navy veteran who serves service members with financial counseling and education. As an Accredited Financial Counselor®, he is a member of the Better Financial Counseling Network and is the owner of JZ Financial Management. As a tax professional and Enrolled Agent, he has a passion for helping taxpayers navigate taxes.
Linda Jacob is a Certified Financial Planner® and an Accredited Financial Counselor®. Linda began working in the banking industry in high school and put herself through college. After years of growing assets for her clients, her true purpose in life became clear. She was put on earth to help everyone become successful money managers, get out of debt, and reach their financial goals. When Linda isn’t working, she enjoys cooking, golfing, and reading.