Earned Income Tax Credit (EITC)

The Earned Income Tax Credit (EITC) is a refundable tax credit for low- to moderate-income workers. It can reduce your tax bill and may give you a refund even if you owe little or no tax. The credit amount depends on your income, filing status, and number of dependents.

💡Simple definition

The EITC is a powerful tax credit that gives money back to working people. If you qualify, it can:

✓Lower your tax bill
✓Increase your refund
✓Provide a refund even if you owe $0 in tax

✅Who qualifies for the EITC?

You generally must:

✓Have earned income
✓Meet specific income limits
✓Use an eligible filing status (not Married Filing Separately)
✓Have a valid Social Security number
✓Not be claimed as a dependent by someone else
✓Be a U.S. citizen or resident alien all year

The amount increases significantly if you have qualifying children.

📊Income limits (general idea)

Income limits change every year, but the idea is simple:

•Lower income → higher potential credit
•Credit phases out as income increases
•Amounts vary by number of dependents

💡 Exact numbers depend on the year; always check the latest IRS charts.

💰How much could you get?

The EITC can range from a small amount to several thousand dollars, depending on:

•Your earned income
•Your filing status
•Number of qualifying dependents

Families with children usually receive the largest credits.

🧮Quick example

Suppose you're a single parent with one child, earning $20,000 for the year. You may qualify for a significant EITC, potentially worth a few thousand dollars.

This credit could reduce your tax to zero and even give you a refund, depending on withholding and other credits.