The Earned Income Tax Credit Puts More Money in the Pockets of Low and Moderate Income Workers

Calendar Icon Updated February 21, 2019
Tax Credits

Although it can put real money in the pockets of many low and middle-income workers, estimates are that one of every five people who qualify for the Earned Income Tax Credit fail to take advantage of it.

The Earned Income Tax Credit, also known as EIC or EITC, is a refundable credit which means that even if you don’t owe the IRS any money, you can file a return and still get an EITC refund check. That’s a great deal for hard working families looking for tax credits where every dollar matters.

The EITC income levels have changed in recent years, so those who weren’t previously eligible to take advantage of this tax credit may have the opportunity to do so now. EITC depends on your filing status and the amount of income you make. You may be eligible for some or all the EITC tax credit if fall within these guidelines:

  • Your income does not exceed $14,820 if you file Single and you have no qualifying children.
  • Your income does not exceed $20,330 if you file Married Filing Jointly, and you have no qualifying children
  • Your income does not exceed $39,131 and you file Single, with one qualifying child.
  • Your income does not exceed $44,651 and you file Married Filing Jointly, with one qualifying child.
  • Your income does not exceed $44,454 and you file Single, with two qualifying children.
  • Your income does not exceed $49, 974 and you file Married Filing Jointly, with two qualifying children.
  • Your income does not exceed $47,747 and you file Single, with three or more qualifying children.
  • Your income does not exceed $53,267 and you file Married Filing Jointly, with three or more qualifying children.

To be a qualified child, they must have a Social Security number; be a U.S. citizen, resident alien, or a nonresident alien married to a U.S. citizen; can only use the EITC credit by one person, or on just one tax return.

Workers without children must be between the ages of 25 and 65 and have lived in the United States for more than half of the year.

The EITC is more valuable if you file your return with one or more qualifying children. For 2015, the maximum Earned Income Tax Credit you can earn is:

  • $503 with no Qualifying Children
  • $3,359 with one Qualifying Child
  • $5,548 with two Qualifying Children
  • $6,242 with three or more Qualifying Children

Special rules apply for certain categories of filers, include members of the military, the clergy, those families with adopted children or those who receive disability benefits. Also, more than 20 states currently offer Local Earned Income Tax Credits.

If you fall into one of these categories, it is best to consult with a tax specialist to see how your situation affects qualifying for the EITC.

If the Earned Income Tax Credit doesn’t apply to your situation, check out these 3 big tax credits that can help you save.

Eligibility Team

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