What Is the Earned Income Tax Credit (EITC)?

How Do Earned Income Tax Credits Work?

The EITC provides tax credits that lower your tax bill dollar-for-dollar—unlike a tax deduction, which reduces your taxable income. Credit eligibility and amounts are based on income, filing status and family size. If your credit is larger than your tax bill, you'll receive the difference as a tax refund. For example, if you owe the federal government $2,500 in taxes and you qualify for an EITC of $3,500, the IRS will refund you $1,000 instead of charging you what you owe.

To qualify for the EITC, your adjusted gross income has to meet income limitations (shown below). You must also have earned income. For EITC purposes, the IRS considers the following to be earned income:

• Wages, salaries and tips
• Pay received for gig work or contracting
• Union strike benefits
• Nontaxable combat pay
• Some disability benefits received before reaching minimum retirement age
• Net earnings from self-employment

While the following types of income may count toward your adjusted gross income, they aren't considered earned income for the EITC:

• Interest and dividends
• Pensions or annuities
• Social Security
• Unemployment benefits
• Alimony
• Child support
• Pay received for work while in prison

Who Qualifies for the Earned Income Tax Credit?

EITC qualification rules vary depending on your filing status and family size. Here are the basics.

For All Taxpayers

• You have earned income from employment or self-employment.
• Your earned income and adjusted gross income must be within defined limits (see tables below).
• Your investment income cannot exceed $11,950 for the 2025 tax year or $12,200 in 2026.
• You, your spouse and qualifying children must have valid Social Security numbers.
• You were a U.S. citizen or resident alien for the full tax year, or a resident alien filing a joint return.
• You have not filed Form 2555 (related to foreign income).

For Single Taxpayers

If you don't have a "qualifying child" as described below, you must meet these additional requirements:

• You are older than 25 but younger than 65 at the end of the tax year.
• You have lived in the United States for more than half the year.
• You are not the dependent or qualified child of another taxpayer.

Who Is a "Qualifying Child"?

Your qualifying child must have a valid Social Security number and meet these four IRS requirements:

• Relationship: Your qualifying child is your biological child, stepchild, adopted child, foster child, sibling (step, half or whole), grandchild, niece or nephew.
• Residency: To qualify, a child must live with you in the United States for at least half the year.
• Age: A qualifying child must be younger than you and your spouse (if you file jointly). Additionally, they should be age 19 or younger (24 or younger if a full-time student). If they're permanently disabled, they can be any age.
• Joint return: Your qualifying child cannot file a joint tax return to claim EITC themselves.

Only one person (or married couple filing jointly) can claim a qualifying child for the EITC. If parents file separately, only one parent can claim the child. The IRS has tie-breaker rules to help determine which parent is entitled to claim the child.

What Are the EITC Income Limits?

Because the EITC is meant to provide relief for low- to moderate-income taxpayers, income limits apply. The following tables show the maximum adjusted gross income you can have and still be eligible to claim at least a partial earned income credit.

In addition, the maximum investment income you can have and still be eligible for the EITC for 2025 is $11,950.

In 2026, the maximum investment income eligible taxpayers can have is $12,200.

How Much Is the Earned Income Tax Credit?

The size of your earned income tax credit depends on the size of your family. Here is the maximum EITC you can receive for the 2025 tax year:

• $8,046 with three or more qualifying children
• $7,152 with two qualifying children
• $4,328 with one qualifying child
• $649 with no qualifying children

For 2026, maximum EITC credits increase as follows:

• $8,231 with three or more qualifying children
• $7,316 with two qualifying children
• $4,427 with one qualifying child
• $664 with no qualifying children

Is the Earned Income Tax Credit Worth It?

If you qualify, the EITC could save you $649 to more than $8,000 in taxes. Yet, despite the potential savings, the IRS reports that roughly 20% of eligible taxpayers don't claim the EITC. One reason could be confusion over eligibility.

Many online tax software programs can help you sort out your eligibility for the EITC, and many of the calculations you'll need to determine eligibility are already part of completing your tax return. The IRS also offers an online EITC Assistant and live volunteer help through its Volunteer Income Tax Assistance (VITA) program, if you need additional support.

Also be aware that if you claim the EITC, your tax refund may be delayed. The IRS is required to wait until mid-February to begin issuing refunds to taxpayers who claim the EITC.

Are There Other Tax Credits Available?

Many tax credits are available to both individuals and families. In addition to the EITC, taxpayers with children or other dependents may want to consider these federal tax credits:

• Child tax credit: Provides a credit of up to $2,200 per qualifying child. The additional child tax credit (ACTC) makes up to $1,700 of the child tax credit refundable.
• Credit for other dependents: If you have dependents who don't qualify for the child tax credit, the credit for other dependents may provide a credit of up to $500 per qualifying dependent.
• Child and dependent care credit: You may be eligible for this nonrefundable tax credit if you've incurred expenses for childcare or care for another dependent so you can work or look for a job.

Frequently Asked Questions

The Bottom Line

Although figuring out your eligibility for the EITC takes a bit of extra work, claiming the EITC can save you significant money on your taxes. Using tax software or IRS online tools, or enlisting the help of a tax professional, can make the process easier.