Who Qualifies for the Earned Income Tax Credit (EITC)?

Tax breaks can include tax credits and tax deductions like the Earned Income Tax Credit (EITC).

These tax breaks are a great way to ease your tax obligations so you can pay less in taxes and potentially get a larger tax refund.

Learn more about the EITC to see if you qualify and how much you could get.

What is Earned Income? 

Learning about the Earned Income Tax Credit is a lot easier if you know what earned income is. Earned income is all income received from wages, salary, tips, or benefits. 

Your earned income includes all your sources of income together. This might include: 

• Wages 
• Salary 
• Tips 
• Disability benefits 
• Self-employment income

But there is income that isn't considered "earned" by the IRS like: 

• Interest 
• Dividends
• Pensions
• Social security 
• Unemployment benefits
• Alimony 
• Child support

So the biggest difference between income and earned income, is that earned income is a term the IRS uses to talk about income that is taxable. 

What is the Earned Income Tax Credit (EITC)? 

The Earned Income Tax Credit (EIC or EITC) is a tax credit designed for taxpaying workers who make a low to moderate income. It was created to alleviate tax liability for taxpayers who bring in a lower amount of earned income each year. 

The reason this tax credit is named after earned income is because the credit is based on how much you make and the tax bracket you fall under. 

Some other factors that are considered in whether someone qualifies for the Earned Income Tax Credit are your tax filing status and how many dependents you have. 

The Earned Income Credit Qualifications

As with all tax credits, tax breaks, and tax deductions, there are requirements you must meet before you can claim the Earned Income Tax Credit. 

Earned Income Tax Credit Requirements:

• You worked and had income under $63,398
• You have investment income below $11,000
• You have a Social Security Number
• You are a US citizen or resident alien 
• You don't have foreign earned income
• If you’re separated from your spouse and not filing jointly, then you meet certain rules

What Disqualifies You from the Earned Income Credit?

Because of its name, you might think that the Earned Income Tax Credit is available to anyone who earned income.

But this isn't the case.

There are a few reasons why someone might be disqualified from the earned income credit as well. 

 Earned Income Tax Credit Disqualifications:

• You worked and had income over $63,398
• You have investment income over $11,000
• You don’t have a Social Security Number
• You aren’t a US citizen or resident alien 
• You have foreign earned income
• You’re separated from your spouse and not filing jointly, and don’t meet certain rules

How to Claim the Earned Income Credit

To claim the earned income tax credit, you'll need to file Tax Form 1040, the tax return form for US individuals filing their income tax return.

If you are a senior, then you might want to fill out a variation of this form, the 1040 SR. It is on this form that you will claim the EIC or EITC. 

If you have a child or dependent, this impacts the earned income credit you would receive.

So, you'll need to make mention of your dependents on your tax return as well. Fill out and file the Schedule EIC form if you want to claim the earned income credit and have children. 

How the Earned Income Credit Works

If you qualify for claiming this credit, you'll want to do so on your next tax return. In fact, if you qualified for this credit in the past 3 years, but forgot to claim this credit on your last 3 tax returns, you can still make this adjustment by noting this in your next tax return. 

This income tax credit can help lower your overall tax obligation, and it can even get you a tax refund! Basically, the lower your income the more you can receive via this tax credit. 

Something else you should know is that if you claim this tax credit, it might take a little longer for you to receive your tax refund.

By law, the IRS is unable to send out tax refunds that claim this credit until after mid-February. But if you end up getting more money in long run, then it might be worth the wait. 

The Earned Income Credit Table 2023

There are specific income limits for anyone trying to claim this credit that we've outlined in the Earned Income Credit Table 2023 below. 

The EITC is specifically for individuals who make under a certain amount, so the IRS put limits in place to ensure that this tax break was only going toward the demographics that needed the most help.

The earned income credit table below will help you figure out if you meet the basic earned income credit qualifications and how much you could receive. 

2023 Earned Income Tax Credit Income Limits

There are a few things you'll need to know to understand this table and how it applies to you and your tax situation. 

First, find where you sit in the table, how many children or dependents do you have and what is your tax filing status? 

Next, find out where you sit in the table with regards to your earned income and adjusted gross income.

Adjusted Gross Income (AGI) is a tax term used by the tax system to refer to a taxpayer's total gross income after some deductions.

So, while gross income is total income before taxes, and net income is total income after taxes, adjusted gross income is total income after tax deductions.