Earned Income Tax Credit (EITC) is a benefit for people who have incomes at or under certain levels. This tax credit reduces the total amount of taxes you owe and in many cases, if you qualify you’ll get a larger tax refund.
To claim EITC there are several requirements that must be met.
- You must file a tax return with the IRS, even if you don’t owe taxes for the year or aren’t otherwise required by the IRS to file.
- You must either have a qualifying child or be between the ages of 25 and 65.
- You must live in the United States for more than 6 months out of the year.
- You must not be anyone else’s qualifying child or be claimed on anyone else’s tax return as a dependent.
- You must work for someone who pays you or own a business. Child support, alimony, social security, unemployment benefits, retirement income, interest income, and income received while incarcerated do not count as income for the EITC.
- You must be a citizen of the United States and have a social security number.
- You must not use the filing status Married Filing Separately.
Qualifying child rules
Children claimed on tax returns for the purposes of the EITC must meet certain requirements defined by the IRS. They must have a valid social security number. Also, they must be under the age of 19 and younger than you. If you file a joint return with your spouse the child must also be younger than them.
If they are older than 19, they still may qualify if they are under the age of 24 and in school full-time for at least five months of the year. Children who are partially or fully disabled qualify at any age.
The child must also be related to you as a son, daughter, stepchild, authorized foster child, or adopted child. The children of those qualifying children also count for the EITC. Other relatives that qualify for the EITC include your sibling or half-sibling, step sibling, or their children.
If you plan to claim a child for the purposes of the EITC, that child must live with you for at least half of the tax year.
Dependent Parent or Relative
You may be able to claim an exemption for your parent or relative, providing he/she meets the following IRS criteria: Their gross income must be below $3,700 per year, and you have to provide more than half of their support for the taxable year. They do not have to live with you.
Income limits for 2019 EITC
To claim EITC, your income must meet certain IRS requirements. For 2019, people who file as single, head of household, or widowed/widower and do not have any qualifying children, the maximum income to file EITC is $15,820. With one qualifying child it’s $41,756, with two qualifying children it’s $47,440, and with three or more qualifying children it’s $50,954.
For households where the filing status is married filing jointly and there are no qualifying children, the maximum income is $21,710. With one qualifying child it’s $47,646. With two children it’s $53,330, and with three or more children it’s $56,844.
There are special income requirements for households with a disabled child or adult, and for members of the clergy and the military.
If you didn’t know about the EITC in the past, but think you may have been eligible for it, you can claim the credit going back three years. It’s best to get assistance from a qualified tax preparer to refile for past years. Filing for the EITC correctly could increase your refund, so it’s worth the effort to find out if you are or have been eligible for this tax credit. You can also visit the IRS website for more information on EITC.
Taxes can be overwhelming. That's why we've created the Sunset Finance Guide to Tax Returns to provide more information.