The Earned Income Tax Credit (EITC) Explained
What is the Earned Income Tax Credit (EITC)?
The Earned Income Tax Credit (EITC) is a refundable credit that gives hardworking families and individuals money back at tax time. The credit is designed to encourage and reward work, offset federal payroll and income taxes, and raise living standards.
If you qualify for the EITC, you can still receive a tax refund even if you don’t owe income tax. You can claim the credit whether you’re single or married or have children or not. The main requirement is that you have earned income during the tax year.
eligibility requirements
Basic Qualifying Rules:
INCOME: Have worked and earned income. Your income cannot exceed the amounts in the chart below, including investment income. Earned income includes wages, salary, tips, employer-based disability, self-employment income, military pay, or union strike benefits.
SSN: You need to have a valid social security number that permit work for you, your spouse, and any children claimed for the EITC. You cannot claim the EITC if you file your taxes with an ITIN. You must also have been a U.S. citizen or a resident alien all year.
Special Qualifying Rules:
QUALIFYING CHILD: If you claim children for the EITC, they must be a “qualifying child.” See below for details.
*While claiming children is not a requirement, families with multiple children are eligible for higher credit amounts.
eitc for the 2024 Tax filing Year
| Number of children | Single or Head of Household workers with income that does not exceed | Married workers with income that does not exceed | Maximum EITC |
| No children | $18,591 | $25,511 | $632 |
| 1 child | $49,084 | $56,004 | $4,213 |
| 2 children | $55,768 | $62,688 | $6,960 |
| 3+ children | $59,899 | $66,819 | $7,830 |
Additional Criteria
- If you are not claiming children, you must be between the ages of 25 and 64. *at least one spouse must meet the age rule
- Married couples must file taxes jointly (in most cases).
- Investment income must be no more than $11,600 for the year.
Qualifying Children
- Relationship: The child must be your son, daughter, grandchild, stepchild or adopted child; younger sibling, step-sibling, half-sibling, or their descendent; or a foster child placed with you by a government agency.
- Age: The child must be under 19, under 24 if a full-time student, or of any age if totally and permanently disabled.
- Residency: The child must live with you in the U.S. for more than half the year. Time living together doesn’t have to be consecutive.
What is the benefit of the EITC?
The EITC is the largest, most effective relief program in the country. It’s designed to fill the gap between what you earn and what’s required to meet the basic needs of you and your family by increasing your income with a refundable tax credit.
Qualifying for the EITC can help you to:
- #1 Build your savings for emergencies and unexpected events
- #2 Use as a relief from high housing costs
- #3 Spend EITC funds locally to promote workforce participation, fuel the economy, and support your community
- #4 Pursue additional education and training that boosts your earning power.
- #5 Save money for your dependent's college costs
- #6 Afford the medical care
EITC income for children living in eligible families is linked to more work hours and higher earnings later in life
Individuals Who May Not Be Aware that They Qualify for the EITC
GRANDPARENT CAREGIVERS & FOSTER CARE PARENTS:
Grandparents and other relatives care for millions of children in foster care and outside of the formal child welfare system. Relative caregivers and foster parents often do not know that they may be able to claim the children they take care of for the EITC or the Child Tax Credit (CTC).
VICTIMS OF ABUSE:
Not only do victims of domestic violence experience physical and psychological harm, domestic violence can lead to economic distress, financial dependence and employment instability. Free tax filing assistance and refundable tax credits, such as the EITC and CTC, may be a lifeline that can help survivors to boost earning power, establish a safety net, and ultimately end financial relationships with an abusive partner.
LOW-INCOME WORKERS WITHOUT CHILDREN:
Tax credits can represent a useful income boost for hardworking individuals who do not have children living with them. While workers not living with children receive only a small EITC, some non-custodial parents may be eligible for a substantial Child Tax Credit if they are permitted by a divorce or separation agreement to claim a child as a dependent.
WORKERS WITH DISABILITIES & CHILDREN WITH DISABILITIES:
Individuals with disabilities and families that are raising children with disabilities face profound challenges. Workers who receive long-term, employer-paid disability benefits and are under the minimum retirement age can qualify for the EITC and CTC, even if they didn’t work during the year. These benefits are considered earned income. Families need to know that a child of any age with a permanent and total disability can be claimed for the EITC. Workers who have a severe disability or are raising a child with a severe disability can claim the tax credits and continue to receive other public benefits.
WORKERS RECENTLY UNEMPLOYED:
Workers who are recently unemployed, experiencing reduced income, or engaged with workforce training and development programs may be eligible for the EITC.
LIMITED ENGLISH SPEAKING WORKERS:
Language assistance is available at select tax site locations in Spanish, Mandarin Chinese (and other Asian languages), and American Sign Language for deaf or hard of hearing individuals.
Schedule an appointment with the Cuyahoga EITC Coalition to see if you qualify for the earned income tax credit