The Earned Income Credit (EIC) is a tax credit that helps low- and moderate-income working individuals and families. The EIC is a refundable credit, meaning that you can get money back from the government even if you don't owe any taxes. The amount of the credit you can claim depends on your income, filing status, and the number of qualifying children you have.
To qualify for the EIC, you must meet all of the following requirements:
If you meet all of the requirements, you can claim the EIC on your federal income tax return. The EIC is a valuable credit that can help you save money on your taxes. If you think you may qualify, be sure to claim the EIC when you file your tax return.
Who qualifies for earned income credit
The Earned Income Credit (EIC) is a tax credit for low- and moderate-income working individuals and families.
- Earned income below certain limits
- Investment income below certain limits
- U.S. citizen or resident alien
- Valid Social Security number
- Qualifying child or children
- Main home in the U.S.
- File a tax return
- Not claimed as a dependent
- Meet residency requirements
If you meet all of these requirements, you may be eligible for the EIC. The amount of the credit you can claim depends on your income, filing status, and the number of qualifying children you have.
Earned income below certain limits
One of the requirements to qualify for the Earned Income Credit (EIC) is that your earned income must be below certain limits. Earned income includes wages, salaries, tips, and other taxable income from working. It also includes net earnings from self-employment.
The EIC income limits vary depending on your filing status and the number of qualifying children you have. For 2023, the income limits are as follows:
- Single, no qualifying children: $16,480
- Married filing jointly, one qualifying child: $27,380
- Married filing jointly, two or more qualifying children: $29,750
- Head of household, one qualifying child: $20,920
- Head of household, two or more qualifying children: $23,350
If your earned income is above these limits, you will not be eligible for the EIC.
Note that the EIC income limits are adjusted each year for inflation. For the most up-to-date information, please visit the IRS website.
If you meet all of the other EIC requirements, but your earned income is slightly above the limit, you may still be eligible for a smaller credit amount. Be sure to file your tax return and claim the EIC even if you think you may not qualify.
Investment income below certain limits
Another requirement to qualify for the Earned Income Credit (EIC) is that your investment income must be below certain limits. Investment income includes interest, dividends, and capital gains. It does not include income from working, such as wages, salaries, or tips.
The EIC investment income limits are the same for all filers, regardless of filing status or number of qualifying children. For 2023, the investment income limit is $10,300.
If your investment income is above this limit, you will not be eligible for the EIC.
Note that the EIC investment income limit is not adjusted each year for inflation. Therefore, it is important to check the IRS website for the most up-to-date information.
If you meet all of the other EIC requirements, but your investment income is slightly above the limit, you may still be eligible for a smaller credit amount. Be sure to file your tax return and claim the EIC even if you think you may not qualify.
U.S. citizen or resident alien
To qualify for the Earned Income Credit (EIC), you must be a U.S. citizen or a resident alien. This means that you must have a valid Social Security number and meet certain residency requirements.
U.S. citizens are automatically eligible for the EIC, regardless of their immigration status. This includes native-born U.S. citizens, naturalized U.S. citizens, and U.S. citizens living abroad.
Resident aliens are also eligible for the EIC, but they must meet certain residency requirements. To be considered a resident alien, you must meet one of the following tests:
- Green card test: You must have a valid green card (Permanent Resident Card) for the entire tax year.
- Substantial presence test: You must be physically present in the United States for at least 31 days during the current tax year and 183 days during the three-year period that includes the current tax year and the two preceding tax years.
If you are not a U.S. citizen or a resident alien, you will not be eligible for the EIC.
Note that there is an exception for certain non-resident aliens who are married to U.S. citizens or resident aliens. These individuals may be eligible for the EIC if they meet certain other requirements. For more information, please see the IRS website.
Valid Social Security number
To claim the Earned Income Credit (EIC), you must have a valid Social Security number (SSN). This is true for both the taxpayer and any qualifying children.
A valid SSN is a nine-digit number that is issued by the Social Security Administration (SSA). You can get an SSN by applying for one at your local SSA office. You will need to provide proof of your identity and citizenship or lawful resident status.
If you do not have a valid SSN, you will not be eligible for the EIC. However, there are some exceptions for certain non-resident aliens who are married to U.S. citizens or resident aliens. These individuals may be eligible for the EIC if they meet certain other requirements. For more information, please see the IRS website.
It is important to note that you cannot use an Individual Taxpayer Identification Number (ITIN) to claim the EIC. ITINs are issued to non-resident aliens who are not eligible for SSNs.
Qualifying child or children
To claim the Earned Income Credit (EIC), you must have one or more qualifying children. A qualifying child is a child who meets all of the following requirements:
- Age: The child must be under the age of 19 at the end of the tax year. This includes children who are temporarily away from home for educational purposes, medical care, or similar reasons.
- Relationship: The child must be your son, daughter, stepchild, foster child, brother, sister, half-brother, half-sister, stepbrother, stepsister, or a descendent of one of these individuals. The child can also be your spouse's child or the child of your parent or grandparent.
- Dependency: The child must be claimed as a dependent on your tax return. This means that you must provide more than 50% of the child's support during the tax year.
- Citizenship: The child must be a U.S. citizen, a resident alien, or a non-resident alien who is admitted to the U.S. for a period of more than one year.
- Social Security number: The child must have a valid Social Security number. You cannot use an Individual Taxpayer Identification Number (ITIN) for your child.
If your child meets all of these requirements, you can claim the EIC for your child. The amount of the credit you can claim depends on your income, filing status, and the number of qualifying children you have.
Main home in the U.S.
To claim the Earned Income Credit (EIC), you must have a main home in the United States for more than half of the tax year. This means that you must live in the United States for at least 183 days during the tax year.
Your main home can be a house, apartment, mobile home, boat, or other type of dwelling. It does not have to be your primary residence, but it must be the place where you normally live. If you live in more than one place during the tax year, your main home is the place where you spend the most time.
You can also have a main home in the United States if you are temporarily away from home for certain reasons, such as:
- Military service: You are a member of the U.S. Armed Forces and are stationed outside of the United States.
- Educational purposes: You are a full-time student and are attending school outside of the United States.
- Medical care: You are receiving medical care outside of the United States.
- Other temporary absences: You are temporarily away from home for other reasons, such as a vacation or business trip.
If you meet all of the other EIC requirements, but you do not have a main home in the United States for more than half of the tax year, you will not be eligible for the EIC.
File a tax return
To claim the Earned Income Credit (EIC), you must file a tax return, even if you do not owe any taxes. You can file your tax return electronically or by mail. If you file electronically, you can receive your refund faster.
When you file your tax return, you will need to use Form 1040 or Form 1040-SR. You can download these forms from the IRS website or you can get them from your local IRS office.
On your tax return, you will need to complete the following steps to claim the EIC:
- Determine if you meet the eligibility requirements. Review the EIC eligibility requirements listed in this article to make sure you meet all of them.
- Gather your supporting documents. You will need to have documentation to support your EIC claim, such as your Social Security number, proof of income, and proof of qualifying children.
- Complete the EIC worksheet. The EIC worksheet is used to calculate the amount of your EIC credit. You can download the EIC worksheet from the IRS website or you can get it from your local IRS office.
- Transfer the amount of your EIC credit to your tax return. Once you have completed the EIC worksheet, you will need to transfer the amount of your EIC credit to your tax return. The EIC credit is claimed on line 27 of Form 1040 or line 26 of Form 1040-SR.
If you need help filing your tax return or claiming the EIC, you can contact the IRS at 1-800-829-1040. You can also get help from a tax professional.
Not claimed as a dependent
To claim the Earned Income Credit (EIC), you cannot be claimed as a dependent on someone else's tax return. This means that you cannot be claimed as a dependent by your parents, grandparents, or other relatives.
- Age: You must be age 24 or older by the end of the tax year.
- Support: You must provide more than half of your own support during the tax year. This means that you must pay for more than half of your own living expenses, such as food, housing, and clothing.
- Marital status: You must be unmarried or considered unmarried on the last day of the tax year. This means that you cannot be married, living with a spouse, or legally separated from your spouse.
- Qualifying child or children: If you have a qualifying child or children, you can still be claimed as a dependent on someone else's tax return. However, you cannot claim the EIC if you are claimed as a dependent.
If you meet all of the other EIC requirements, but you are claimed as a dependent on someone else's tax return, you will not be eligible for the EIC.
Meet residency requirements
To claim the Earned Income Credit (EIC), you must meet certain residency requirements. You must be a U.S. citizen or resident alien, and you must have a main home in the United States for more than half of the tax year.
- U.S. citizen: You must be a U.S. citizen at the end of the tax year.
- Resident alien: You must be a resident alien for the entire tax year. To be considered a resident alien, you must meet the substantial presence test or the green card test.
- Substantial presence test: You must be physically present in the United States for at least 31 days during the current tax year and 183 days during the three-year period that includes the current tax year and the two preceding tax years.
- Green card test: You must have a valid green card (Permanent Resident Card) for the entire tax year.
If you meet all of the other EIC requirements, but you do not meet the residency requirements, you will not be eligible for the EIC.
FAQ
Do you have questions about who qualifies for the Earned Income Credit (EIC)? Here are some frequently asked questions and answers:
Question 1: Who is eligible for the EIC?
Answer: To be eligible for the EIC, you must meet all of the following requirements:
- Earned income below certain limits
- Investment income below certain limits
- U.S. citizen or resident alien
- Valid Social Security number
- Qualifying child or children
- Main home in the U.S.
- File a tax return
- Not claimed as a dependent
- Meet residency requirements
Question 2: What are the income limits for the EIC?
Answer: The EIC income limits vary depending on your filing status and the number of qualifying children you have. For 2023, the income limits are as follows:
- Single, no qualifying children: $16,480
- Married filing jointly, one qualifying child: $27,380
- Married filing jointly, two or more qualifying children: $29,750
- Head of household, one qualifying child: $20,920
- Head of household, two or more qualifying children: $23,350
Question 3: What are the investment income limits for the EIC?
Answer: The EIC investment income limit is $10,300 for 2023. This limit is the same for all filers, regardless of filing status or number of qualifying children.
If you have any other questions about the EIC, you can visit the IRS website or contact the IRS at 1-800-829-1040.
Now that you know who qualifies for the EIC, here are some tips for claiming the credit:
Tips
Here are some tips for claiming the Earned Income Credit (EIC):
Tip 1: Review the EIC eligibility requirements carefully.
Make sure you meet all of the EIC eligibility requirements before you file your tax return. You can find the EIC eligibility requirements on the IRS website or in this article.
Tip 2: Gather your supporting documents.
You will need to have documentation to support your EIC claim, such as your Social Security number, proof of income, and proof of qualifying children. Make sure you have all of your supporting documents before you file your tax return.
Tip 3: Use the EIC Assistant tool.
The IRS offers an EIC Assistant tool on their website that can help you determine if you are eligible for the EIC and how much your credit will be. This tool is a great way to get a quick estimate of your EIC credit before you file your tax return.
Tip 4: File your tax return electronically.
Filing your tax return electronically is the fastest and easiest way to get your refund. You can file your tax return electronically using tax software or through the IRS website.
By following these tips, you can help ensure that you claim the EIC correctly and receive the maximum refund you are entitled to.
Now that you know who qualifies for the EIC and how to claim it, you can take steps to make sure you receive this valuable credit.
Conclusion
The Earned Income Credit (EIC) is a valuable tax credit that can help low- and moderate-income working individuals and families save money on their taxes. To qualify for the EIC, you must meet certain requirements, including having earned income below certain limits, having a valid Social Security number, and meeting residency requirements. You must also have a qualifying child or children and cannot be claimed as a dependent on someone else's tax return.
If you meet all of the EIC eligibility requirements, you should file your tax return and claim the EIC. The EIC is a refundable credit, which means that you can get money back from the government even if you do not owe any taxes. The amount of the credit you can claim depends on your income, filing status, and the number of qualifying children you have.
By understanding who qualifies for the EIC and how to claim it, you can take advantage of this valuable tax credit and save money on your taxes.