The Earned Income Tax Credit (EITC) is a federal tax benefit for low and moderate-income working people. The EITC offsets some or all of a worker’s federal income taxes and in many cases provides a supplemental source of income to help offset other taxes, such as sales or payroll taxes. More than 26 million workers received the EITC in 2017. In 2017, the credit lifted more than 5.7 million Americans, including 3 million children, out of poverty, making it one of the nation’s largest and most successful anti-poverty programs.
The size of a worker’s EITC depends on his or her income, marital status and number of children. The credit amount increases with each dollar earned until it reaches a maximum level and then begins to phase out at higher income levels. The EITC is “refundable,” meaning it can exceed a low-wage worker’s income tax liability.
The EITC is currently targeted primarily toward workers raising children. For Tax Year 2019, workers with dependent children that have annual incomes below $56,000 may be eligible for the federal EITC. Workers without dependent children earning less than $15,570, or $21,370 for a married couple, can receive a very small EITC. There are a number of efforts underway at both the federal level and in the states to expand the EITC for these workers.
For more information about the Earned Income Tax Credit:
EITC Policy Basics
The Earned Income Tax Credit (EITC) is a federal tax credit for low- and moderate-income working people. It encourages and rewards work as well as offsets federal payroll and income taxes. Twenty-nine states, plus the District of Columbia, have established their own EITCs to supplement the federal credit.
Filing for the EITC
You can't get the EITC unless you file a federal tax return and claim it. If you have a qualifying child, you must file the Schedule EIC listing the children with the Form 1040, US Individual Income Tax Return or Form 1040 SR, U.S. Tax Return for Seniors.