The Earned Income Tax Credit (EITC) has helped workers with low and moderate incomes get a tax break for over 40 years. Yet, one out of every five eligible workers fails to claim it.
What Taxpayers Should Know About the EITC
Review Your Eligibility
Taxpayers who worked and earned under $53,505 may qualify for EITC. Filers should review EITC eligibility rules if their household income or family situation has changed. They may qualify for EITC this year, even if they did not in the past.
To qualify, a taxpayer must file a federal income tax return claiming the Earned Income Tax Credit. This is true even if a taxpayer is not otherwise required to file a tax return.
Use the EITC Assistant tool to find out about eligibility rules and amounts.
Know the Rules
Taxpayers need to understand the rules before they claim the EITC. It is important to get this right. Here are some factors to consider:
- Taxpayers who are married and file a separate return do not qualify for the EITC.
- Filers must have a Social Security number valid for employment for themselves, their spouse (if married), and any qualifying child listed on their filed tax return.
- Taxpayers must have earned income, which may include earnings from working for someone else as an employee or being self-employed.
- Filers may be married or single, with or without children to qualify. Those who do not have children must also meet the age, residency, and dependency rules.
- For a child to qualify, they must have lived with the taxpayer for more than six months in 2016. In addition, the child must meet the age, residency, relationship, and joint return rules to qualify.
- U.S. Armed Forces members serving in a combat zone have special rules that apply.
Lower Your Tax or Get a Refund
Filers who qualify for EITC could pay less federal tax, no tax, or even get a refund. The EITC could be worth up to $6,269. The average credit was $2,482 last year.
Use Free Services
For those who do their own taxes, the best way to file a return to claim EITC is to use IRS Free File.
- Free brand-name software will figure out taxes and the EITC automatically.
- Combining e-file with direct deposit is the fastest and safest way to get a refund.
- Free File is only available on IRS.gov/freefile.
Taxpayers can also get free help preparing and e-filing their return to claim the EITC through the IRS Volunteer Income Tax Assistance (VITA) program. This program offers free help at thousands of sites around the country.
Get help with health care law tax provisions with Free File or VITA.
Refunds Held Until February 15
Beginning in 2017, if taxpayers claim the Earned Income Tax Credit or Additional Child Tax Credit on their tax return, the IRS must hold their refund until at least February 15.
- This applies to the entire refund, even the portion not associated with these credits.
- However, the IRS will begin accepting and processing tax returns once the filing season begins.
- Taxpayers should file as usual. There is no need to wait until February 15.
Frequently Asked Questions
Who qualifies for the Earned Income Tax Credit (EITC)?
To qualify for the EITC, individuals must have earned income under $53,505, a valid Social Security number for employment, and meet specific requirements related to filing status, income, and family situation. Even those without children may qualify if they meet age, residency, and dependency rules.
Can I get the EITC if I don’t owe any taxes?
Yes. The EITC is a refundable credit, which means eligible taxpayers may receive a refund even if they owe no federal tax. In fact, the credit could be worth up to $6,269, depending on income and family size.
How do I claim the EITC?
You must file a federal income tax return and specifically claim the EITC, even if you are not otherwise required to file a return. Using the IRS Free File service or visiting a VITA (Volunteer Income Tax Assistance) site can help ensure it’s claimed correctly.
What if my income or family situation changed this year?
If your income level or household circumstances have changed, you may now be eligible for the EITC even if you weren’t in previous years. It’s important to review the current year’s eligibility rules using tools like the IRS EITC Assistant.
Why is my refund being delayed if I claim the EITC?
The IRS is legally required to hold refunds that include the EITC or Additional Child Tax Credit until at least February 15. This helps prevent fraudulent claims, but it applies to your entire refund—even portions unrelated to the credits.