8 FAQs About the Earned Income Tax Credit

Updated for tax year 2024.

The Earned Income Tax Credit, also called the EITC or EIC, is a tax credit designed to help low- to moderate-income working families and individuals get ahead and put more money back in their pockets. It can provide a significant boost to your federal tax refund each year if you meet certain criteria. For instance, if you are employed, but your earnings fall into what the IRS considers a lower income level based on the size of your family, you may be eligible for the credit.

At a glance:

• The maximum EITC credit available for tax year 2024 is $7,830.
• The Earned Income Tax Credit is available for low- and middle-income workers.
• This tax credit is refundable, meaning you can claim it even if you had no income tax withheld (you’ll still need to file a tax return to claim it).
• Your credit amount depends on your income level, filing status, and family size.

How to calculate Earned Income Tax Credit (EITC)?

The easiest way to determine your EITC eligibility is to enter your information into TaxAct^®, which will automatically calculate the credit based on the details included in your return. Here are the max credit amounts for tax year 2024 based on how many children you have:

Earned Income Tax Credit FAQs

Below are a few common questions and answers taxpayers often have about the EITC.

1. Do I qualify for the EITC even if I didn’t have any income tax withheld and I’m not required to file a tax return?

Yes! Thanks to the EITC, you can get money back even if you didn’t have income tax withheld or pay estimated income tax. This type of tax benefit is called a refundable tax credit. However, you must file a tax return to qualify for the credit, even if you would not otherwise need to.

2. Do I have to earn a very low income to claim the Earned Income Tax Credit?

If you have no qualifying children, you must earn a relatively low income to be eligible for the EITC. For tax year 2024, for example, adjusted gross income limits (AGI limits) mean you must have earned less than $18,591 to meet the requirements for the credit if you have no qualifying children. If you are married filing jointly and have no kids, the income limit is $25,511. However, if you have just one qualifying child and made $49,084 or less in 2024 ($56,004 if married filing jointly), you might be surprised to find you qualify for the EITC when tax filing.

3. Who qualifies for the Earned Income Tax Credit?

Here are the EITC income limits for 2024 based on filing status and family size:

In addition to the income limits above, you must meet the following qualifications to claim the credit for 2024:

• You (plus your spouse if you are married) and your children have Social Security numbers.
• You earn income either working for yourself or as an employee.
• You were a U.S. citizen or resident alien all year, a nonresident alien married to a U.S. citizen, or a resident alien and filing a joint return.
• Someone else cannot claim you as a qualifying child for the EITC.
• You do not have foreign earned income for which you must file Form 2555 or Form 2555-EZ.
• You do not have more than $11,600 in interest, dividends, or other investment income (up from $11,000 in 2023).

If you do not have a qualifying child, you must:

• Be between the ages of 25 and 65 at the end of the year.
• Have lived in the United States for more than half the year.
• Not be the qualifying child of another person.

If you use the married filing separately filing status to claim the EITC:

• You cannot file a joint tax return.
• You must not have lived with your spouse for the last six months (or you have a separation agreement).
• Your child must live with you for more than half the year.

4. Does military combat pay affect my credit?

If you receive combat pay, you can choose whether or not to include it in your taxable income. Ordinarily, combat pay is not included in your taxable income. However, depending on your total earned income and family size, excluding combat income from your taxable income could reduce the amount of EITC for which you qualify. You may be better off counting the combat pay as taxable income in those cases.

When making a choice, remember that this decision is all-or-nothing: You must include all your combat pay or none of it in your taxable income.

5. Can I have my Earned Income Tax Credit added to my paycheck throughout the year?

Not in 2024. In past years, the IRS allowed taxpayers to receive the Advance Earned Income Credit throughout the year. However, in 2010 it was repealed and is no longer available.

6. Can I claim the Earned Income Tax Credit even if my child’s other parent claims him as a dependent?

Yes. As long as the child lived with you for more than half the year, you generally take the EITC based on the child, regardless of which parent claims the child as a dependent. The number of children you claim as dependents is not always the same number of children who qualify you for the EITC.

If you have joint custody of the child and split time equally between each parent, the parent with the higher adjusted gross income takes the credit.

Only one person can claim the same child, and noncustodial parents can’t claim children for purposes of the EITC.

Your qualifying child for the EITC must meet the following qualifications:

• Age or disability. At the end of the filing year, the child was under age 19, or younger than 24 and a full-time student for at least 5 months of the year. The child must be younger than you (or your spouse if you file a joint return.) There is no age limit if the child is permanently and totally disabled.
• Relationship to you. A child for the EITC can be your child, stepchild, brother, sister, half-sibling, stepsibling, foster child, adopted child, or a descendant of any of these.
• Living arrangements. The child must have lived with you in the United States for more than half the year. If you file a joint return, you can include the time the child lived with your spouse.
• No joint return for the child. Your child must not have filed a joint return with his or her spouse unless it was only filed to claim a tax refund and they were not required to file a return.

7. I should have claimed the Earned Income Tax Credit in prior years, but I didn’t. Can I go back and claim the credit now?

Yes. If you filed a tax return but missed out on the EITC in past years,  it’s not too late to file an amended return and claim your credit. If you didn’t receive the credit because you didn’t file, you must file a separate return for each year in which you qualified. While it might be a pain, a little extra effort could put substantial money back in your pocket!

However, you can’t go back indefinitely. You can generally only file an amended return for the past three years. To do so, use TaxAct to file Form 1040X, Amended U.S. Individual Income Tax Return.

8. Is the Earned Income Tax Credit the same as the Child Tax Credit?

The EITC is not the same as the Child Tax Credit, though it is possible to qualify for both. Low-income families often find they are able to get both tax benefits, though childless workers won’t be able to utilize the Child Tax Credit.

The bottom line

The Earned Income Tax Credit is a valuable tax break for low- to moderate-income workers looking to maximize their tax refunds. Whether you’re a single filer or supporting a family, this refundable credit can provide a significant financial boost if you meet the eligibility requirements. With income limits and credit amounts updated each year, it’s worth taking the time to determine your qualification — even if you aren’t required to file a return. By using trusted tax software like TaxAct, you can easily calculate your EITC and ensure you’re claiming every dollar you deserve.

This article is for informational purposes only and not legal or financial advice.

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