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Earned Income Tax Credit 2024: Here’s what you need to know

Online Niel November 7, 2024

What is the earned income tax credit?

The Earned Income Tax Credit (EITC) is a federal tax credit for low- and moderate-income workers with or without children.

Also known as the Earned Income Credit (EIC), the amount you get depends on your income, filing status and number of eligible children. It is also a refundable creditmeaning you can get a tax refund even if you owe no tax.

Each year, families look forward to these tax breaks because they can help pay for food, housing, or expenses related to their child’s education and extracurricular activities. Sometimes the funds can be used to create a nest egg for emergency savings.

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Nationwide, 23 million eligible workers received $57 billion in EITC last year
The average household received approx $2,541 in EITC for tax year 2022 (taxes filed in early 2023)

The The IRS just announced the annual inflation adjustment for the Earned Income Tax Creditas well as other key family tax cuts for fiscal year 2025.

Here’s what you should know about the Earned Income Tax Credit and whether you qualify for the tax break.

A tax break to fight poverty

The Earned Income Tax Credit has been around for almost 50 years and so tax credit for childrenit is known as one of the best anti-poverty programs in the country for those with low and moderate incomes. The Earned Income Tax Credit reduces poverty by supplementing the earnings of low-wage workers.

Before the pandemic, the EITC combined with the child tax credit helped lift 10.6 million people out of poverty and reduce poverty for 17.5 million households.

According to the Center on Budget and Policy Priorities, these programs lifted 5.5 million children out of poverty and reduced poverty to 6.4 million.

Who qualifies for the EITC?

The amount of EITC you get depends on your income, filing status, and the number of eligible children in your household. However, people without children can also qualify for the EIC.

Whether you’re working with children or working but don’t have children, to qualify for the 2024 Income Tax Credit you must meet the following basic criteria:

You must be working and have an income under $66,819
You have investment income of less than $11,600 in the 2024 tax year
Be a US citizen or year-round resident alien
You will not file a Form 2555Foreign earned income
You must have a valid social security number

Social Security Number Requirement:

Note that for the EITC, the IRS will not accept the following forms of identification:

Individual Taxpayer Identification Numbers (ITIN)
Adoption Taxpayer Identification Numbers (ATINs)
Social Security numbers or Social Security cards that state “Not valid for employment.”

Child Earned Income Tax Credit Qualifications

As mentioned, the eligibility standards for the EITC are divided into two categories: those with children and those without. If you have a child, the IRS requires you to meet the following criteria.

The child must meet age, relationship and residency requirements
Eligible child cannot be claimed by more than one person for the EITC
The taxpayer cannot be the qualifying child or dependent of another person

Age

For a child to qualify for the Earned Income Tax Credit, they must be under 19 or a full-time student under 24. They must also be younger than you (or your spouse if filing jointly).

There is one exception: If your child is permanently and totally disabled, the age requirements do not apply for the EITC. (See: Disability and the Earned Income Tax Credit).

Relationship

To qualify for the EITC, your child must be your son, daughter, stepchild, or adopted or foster child. They can also be your brother, half-brother or half-brother. Grandchildren and nieces or nephews are also eligible to be claimed as dependents for the EITC.

RESIDENCE

To claim a child for the Earned Income Tax Credit, your child must live in the same household as you in the United States for more than half of the tax year. The US includes the 50 states District of Columbiaand US military bases. United States territories not included: Guam, Virgin Islands or Puerto Rico.

Dependent status

If your child can file a joint return with another person (for example, their spouse), you cannot claim them on your tax return for the EITC.

Childless Earned Income Tax Credit Qualifications

If you don’t have an eligible child, you can still claim the EITC if you meet all of the following eligibility rules:

You must meet the basic Earned Income Tax Credit qualification rules
Your principal home is in the United States for more than half of the tax year
You must be at least 25 years old but under 65 years old
You are not claimed as a qualifying child on anyone’s tax return

What disqualifies you from the EITC?

There are several factors that may disqualify you from the EITC. If one of the following applies to you, you will not be eligible for the tax credit:

You or your spouse do not have a valid SSN.
Your earned income and adjusted gross income (AGI) exceed the EIC limit.
Your foreign investment income exceeds the EIC limit.
You requested the foreign earned income exclusion on Form 2555.
You filed your tax return as — Married, filing separately.‘

Note: The EITC will be denied if you, the taxpayer, are claimed as a dependent on someone else’s tax return or if your child does not meet the “qualifying” eligibility criteria.

How to claim the EITC

You can claim the earned income tax credit by filing your federal tax return Form 1040 or 1040-SRfor US seniors. If you have an eligible child, you will be required to file a EIC program. The form will ask you for details about the qualifying child, such as their name, SSN, date of birth, relationship to you, and the number of months they have lived with you.

You can also claim the EITC for prior years.

The IRS gives you three years to file and claim a refund from the due date of your tax return. If you’re eligible, you may still have time to claim the EITC for prior years, including:

For 2022, if you file your tax return by April 18, 2026
For 2021, if you file your tax return by April 18, 2025
For 2020, if you file your tax return by May 17, 2024

To deposit a the return of the previous year complete and file Form 1040 and Schedule EIC for the appropriate year, or file an amended return if you already filed but did not include a Schedule EIC (if you had an eligible child).

2024 Credit for income tax

The EITC is designed for people whose earned income was below $66,819 for tax year 2024 (tax returns generally filed in early 2025). The amount you receive will depend on you adjusted gross incomethe amount of investment income earned, your filing status, and whether you have a qualifying child.

In particular, the EITC and phase-out amounts are adjusted for inflation each year. The good news is that tax filers next year will be able to claim slightly more than they did in tax year 2023.

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Here are the income thresholds for the 2024 Income Tax Credit:
Number of children	Maximum income: single persons, head of household or widowers	Maximum income: married filing jointly	The maximum amount of the earned income tax credit
No children	$18,591	$25,551	$632
1 child	$49,084	$56,004	$4,213
2 children	$55,768	$62,688	$6,960
3 or more children	$59,899	$66,819	$7,830

Investment income limit for 2024: $11,600.

Does your state have an EITC?

To date, 31 states, plus the District of Columbia and Puerto Rico, have their own state or local version of the earned income credit in addition to the federal EITC.

Ten states, including California, Colorado, Illinois, Maine, Maryland, Minnesota, New Mexico, Oregon, Vermont, and Washington, plus the District of Columbia, have according to reports credit eligibility has been expanded for certain immigrant taxpayers who file taxes using Individual Tax Identification Numbers (ITINs).

This year, two states expanded their EITCs.

Colorado: The the earned income credit will equal 50% of the federal credit in 2024
Illinois: The state expanded the credit for families with children under 12 by 20% in 2024 and by 40% for subsequent years. This means a 24% match against the federal EITC for 2024 and 28% thereafter.

EITC: Learn more

If you want more information about Earned Income Tax Credit for yourself, a friend or a family member, see EITC Awareness Day.

Each year, the IRS takes a day to shine a light on the refundable credits that many low- and moderate-income households may be missing out on.

There are also free tools available to help you learn about the EITC and other family tax credits you may be eligible for. (See IRS EITC assistant). You can also talk to a certified tax professional if you suspect you may qualify for federal tax relief.

If you are a government agency, employer, tax preparer, or resident of a rural community who would like to raise awareness about the EITC, you can also view The IRS Partner Toolkit or Tax Preparer Toolkit.

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Earned Income Tax Credit 2024: Here’s what you need to know

What is the earned income tax credit?

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