What Is the EITC? Eligibility, Income Limits, and How to Claim

The Earned Income Tax Credit is a refundable federal tax credit for working people with low to moderate incomes. Because it’s refundable, if the credit is larger than the tax you owe, the IRS pays you the difference. For the 2025 tax year (returns filed in 2026), the credit is worth up to $8,046 if you have three or more qualifying children and up to $649 if you file without any children.¹

How Much You Can Get

The maximum credit for the 2025 tax year depends on how many qualifying children you claim:

No qualifying children: $649
One qualifying child: $4,328
Two qualifying children: $7,152
Three or more qualifying children: $8,046

Most filers won’t receive the full amount. The credit phases in as your earnings rise, peaks at a certain income level, then phases out. Where you land on that curve depends on your income, your filing status, and how many children you claim.¹

Who Qualifies

You, your spouse (if filing jointly), and any qualifying child must each have a valid Social Security number issued on or before the filing deadline, including extensions. The SSN must authorize employment in the United States. Numbers issued only for receiving benefits like Medicaid do not qualify.²

You must be a U.S. citizen or resident alien for the whole year. Married filing separately is usually disqualifying, with two exceptions: you lived apart from your spouse for the last six months of the year, or you were legally separated under a written agreement or court decree and were not living together at year’s end.²

Earned Income and Investment Income

Earned income means money from working: W-2 wages, tips, gig work, net self-employment earnings, and nontaxable combat pay if you elect to include it. It doesn’t include unemployment, Social Security, pensions, child support, interest, or dividends.¹

Your investment income for the year must be $11,950 or less. Investment income here includes taxable interest, dividends, capital gains, royalties, and net rental income from personal property. Go over that cap by a dollar and you’re disqualified; there is no partial credit.³

Adjusted Gross Income Limits (2025)

Your AGI must fall below a ceiling that depends on filing status and family size.

Single, head of household, or qualifying surviving spouse:

No children: $19,540
One child: $51,593
Two children: $58,629
Three or more children: $62,974

Married filing jointly:

No children: $26,820
One child: $58,863
Two children: $65,899
Three or more children: $70,244

The credit shrinks gradually as your income moves into the phase-out range rather than cutting off at once. For single filers with children, the phase-out begins at $23,890; for joint filers with children, it starts at $31,160.¹

Qualifying Child Rules

A child has to pass four tests to count toward the credit:

Relationship. The child must be your son, daughter, stepchild, foster child, sibling, step-sibling, or a descendant of any of these (grandchild, niece, nephew).
Age. Under 19 at the end of the tax year, or under 24 if a full-time student for at least five months. A permanently and totally disabled child qualifies at any age.
Residency. The child lived with you in the United States for more than half the year.
Joint return. The child cannot file a joint return with a spouse, unless the return is filed only to claim a refund.

These rules come straight from the statute and are strictly enforced.⁴

When More Than One Person Could Claim the Same Child

The IRS applies a hierarchy. A parent beats a non-parent. If both parents could claim the child but file separately, the parent the child lived with longer wins. If the child spent equal time with each, the parent with the higher AGI wins. When no parent claims the child, the person with the highest AGI can, but only if that AGI is higher than the AGI of any parent who could have claimed the child.⁵

If you share custody or a relative helps raise your child, settle who’s claiming the child before you file. Duplicate claims are a common audit trigger.

Filing Without a Qualifying Child

You can still claim a smaller credit, but age rules apply. You must be at least 25 and under 65 at the end of the tax year. If you file jointly, at least one spouse has to fall in that range. You also cannot be claimed as a dependent or qualifying child on someone else’s return.²

Special Situations

Military Combat Pay

If you receive nontaxable combat pay, you can choose whether to include it as earned income for the EITC. Including it sometimes raises the credit and sometimes lowers it, depending on where it puts you on the phase-in and phase-out curve. Combat pay appears in box 12 of your W-2, marked with code Q. Joint filers where both spouses have combat pay decide independently; you don’t have to make the same election.⁶

Clergy Housing

If your church provides a housing allowance or a parsonage, you must include the rental value of that housing as earned income when you calculate the EITC, even though it’s excluded from taxable income. It’s treated as self-employment income for this purpose. This does not apply if you have an approved Form 4361 or Form 4029 exempting you from self-employment tax.⁶

Self-Employment

Net earnings from self-employment count as earned income, but the IRS looks closely at these claims because self-reported figures are easier to inflate than W-2 wages. Keep invoices, receipts, bank statements, and mileage logs. If you’re audited, the IRS will want documentation for every number on your Schedule C, and telling an auditor what you earned won’t be enough on its own.⁷

How to Claim the Credit

You claim the EITC on Form 1040. If you have qualifying children, attach Schedule EIC and list each child’s name, Social Security number, date of birth, and relationship to you. Names and SSNs have to match the child’s Social Security card exactly; mismatches slow processing.⁸

Pull together Social Security cards and birth dates for everyone on the return before you start. Keep last year’s return handy too; your prior-year AGI is used to verify electronic filing.

You can file for free through IRS Free File if your AGI is $89,000 or less, which covers essentially every EITC-eligible filer.⁹ E-filing with direct deposit is faster and produces fewer errors than paper.

If you’d rather have someone else prepare your return, Volunteer Income Tax Assistance (VITA) offers free help for people who generally earn $69,000 or less, people with disabilities, and taxpayers with limited English proficiency. Sites are available nationwide and staffed by IRS-certified volunteers.¹⁰

When Your Refund Will Arrive

By law, the IRS cannot release refunds that include the EITC or the Additional Child Tax Credit before mid-February. The delay applies to your whole refund, not only the credit portion. It gives the IRS time to verify income and screen out fraudulent claims.¹¹

If you file early, pick direct deposit, and your return has no issues, your refund generally arrives by early March. The IRS “Where’s My Refund?” tool usually shows a personalized refund date by late February for early EITC filers. Your bank may need a little extra time to post the deposit around weekends and holidays.

If You Claim the Credit Incorrectly

Getting the EITC wrong has consequences beyond paying it back. If the IRS decides you claimed the credit through reckless or intentional disregard of the rules, you’re barred from claiming it for two years. If the claim was fraudulent, the bar is ten years.⁴

Honest mistakes still leave a mark. If your EITC is denied or reduced for any reason other than a math error, you must file Form 8862 with your next return to claim the credit again. The form asks you to show you now meet all the rules. You don’t need to file it again in later years unless the credit is denied a second time.¹²

State Earned Income Credits

Roughly 30 states plus the District of Columbia offer their own EITC on top of the federal credit. Most calculate it as a percentage of the federal amount, with rates ranging from around 5% up to 125%. Some states make their credit refundable; others let you use it only to reduce state tax owed. A few states use their own formula rather than the federal amount.¹³

You generally claim the state credit on your state return. Some states require you to have claimed the federal EITC first. Check your state tax agency’s website for the specific rules and amount where you live.

1
Internal Revenue Service. Earned Income and Earned Income Tax Credit (EITC) Tables
2
Internal Revenue Service. Who Qualifies for the Earned Income Tax Credit (EITC)
3
Internal Revenue Service. Publication 596 (2025) – Earned Income Credit (EIC)
4
Office of the Law Revision Counsel. 26 USC 32 – Earned Income
5
Internal Revenue Service. Qualifying Child Rules
6
Internal Revenue Service. Military and Clergy Rules for the Earned Income Tax Credit
7
Internal Revenue Service. EITC Due Diligence and Self-Employed Taxpayers
8
Internal Revenue Service. 2025 Schedule EIC (Form 1040)
9
Internal Revenue Service. Use IRS Free File to Conveniently File Your Return at No Cost
10
Internal Revenue Service. Free Tax Return Preparation for Qualifying Taxpayers
11
Internal Revenue Service. When to Expect Your Refund if You Claimed the Earned Income Tax Credit or Additional Child Tax Credit
12
Internal Revenue Service. Instructions for Form 8862
13
Internal Revenue Service. States and Local Governments With Earned Income Tax Credit