Earned Income Tax Credit (EITC)

Posted by Madison on February 8, 2014

What is the Earned Income Tax Credit?

The earned income tax credit (EITC) is an incentive to work for low to moderate income individuals and families.

The earned income credit is refundable, which means that even if you don’t owe any taxes, you can still get a refund.

2016 Earned Income Tax Credit Income Limits

The maximum 2016 income for your tax return filed in 2017 (earned income and adjustable gross income) for the IRS EITC is as follows:

  • Three or more qualifying children: You must earn less than $47,955 ($53,505 married filing jointly).
  • Two qualifying children: You must earn less than $44,648 ($50,198 married filing jointly).
  • One qualifying child: You must earn less than $39,296 ($44,846 married filing jointly).
  • No qualifying children: You must earn less than $14,880 ($20,430 married filing jointly).

EITC Tax Credit Requirements

  • Qualifying children must meet relationship, age, and residency tests, which is different than the dependent rules.
  • If you don’t have children, you must be age 25 – 64 to qualify for the earned income credit.
  • To get the earned income tax credit, you must have earned income and file a tax return.
  • You cannot claim foreign earned income.
  • Your investment income must be $3,400 or less.
  • You cannot use the married filing separately filing status.

In addition, you must have a SSN and be a U.S. citizen or resident alien all year to claim the 2016 EITC credit.

EITC Will Delay Your Tax Refund

If you claim the earned income tax credit, your entire tax refund will be delayed until February 15. For more information, see IRS Will Delay Tax Refunds if You Claim These Tax Credits.

More information on EITC tax is available in Publication 596.

EITC Calculator

To calculate the amount of your earned income credit, use the tax calculator.

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