Earned Income Tax Credit: What Is it, and Who Qualifies?

Getting ready to file your taxes often comes with a lot of stress and paperwork. But it also comes with deductions and tax credits, which can help you save money and get more back on your refund. 

The earned income tax credit, or EITC, is one of those tax credits. Learning about how it works and who is eligible can help you determine if you qualify for this tax break next tax season. 

What is the earned income tax credit? 

The EITC is a benefit designed for working Americans who earn a low to moderate income. It’s often given to families with children, dependents, or disabled family members who struggle to make ends meet. 

If you qualify for the earned income tax credit, you'll receive a reduction in the amount of taxes you owe. It essentially offers a tax break so families can use the money elsewhere, like on groceries or to pay for utilities. 

Another positive aspect of the EITC is that you can get a refund if the credit is larger than your owed amount. You'll simply get the difference in the form of a check or a direct deposit. 

Definition of earned income 

With an idea of what the earned income tax credit is, you should also know what qualifies as earned income so you understand what counts towards your potential credit. 

Earned income is any salaries, wages, or tips that count as employee pay. In other words, it's any money you receive for performing a job for an employer, yourself, or a business. 

Earned income can include: 

• Any income where federal income taxes are withheld on a W-2 
• Self-employment income 
• Gig or freelance work where the employer does not withhold taxes, such as: 
  • Ridesharing or delivery services 
  • Pet sitting or dog walking 
  • Selling things online 
• Benefits from a disability or union strike 

Earned income doesn't include things like child support, alimony, Social Security, pensions, or unemployment benefits. The only exception for this is nontaxable combat pay, which you have the choice of including. 

Who is eligible for the earned income tax credit? 

To qualify for the earned income tax credit, your earned income and adjusted gross income must be below certain levels. This will depend on your filing status and how many children you have. General qualifications for the earned income tax credit include: 

• You must have some kind of earned income 
• Your investment income needs to be below the limit (the limit changes yearly) 
• You must be a United States citizen for the entire tax year and have a valid Social Security number 
• You need to meet specific rules if you aren’t filing jointly and you and your spouse are separated 
• You cannot file for foreign-earned income 

While having children isn't a requirement to qualify for EITC, people with more children tend to receive higher tax credits. Additionally, the lower your income is, the higher your earned income tax credit will be. 

It’s possible that you may have different qualifications if you are a military or clergy member or if you have relatives with disabilities. Use the IRS qualification assistant if you think this is the case. You may qualify for the earned income tax credit even if you’re not married or don’t have a child. 

Earned income tax credit amounts 2024 (for taxes filed in 2025)

The maximum earned income for single filers ranges from $18,591 to $59,899, and the maximum for joint filers ranges from $25,511 to $66,819. Ranges depend on how many dependents you have. 

For the 2024 tax year or the tax return you’ll file in 2025, the earned income tax credit ranges from $632 to $7,830. 

Courtesy of IRS.com

Earned income tax credit amounts 2025 (for taxes filed in 2026)

The maximum earned income for single filers ranges from $19,104 to $61,555, and the maximum for joint filers ranges from $26,214 to $68,675. Along with this, the 2025 tax year’s earned income tax credits range from $649 to $8,046.

Courtesy of IRS.com

How to claim the earned income tax credit 

Now that you know what the earned income tax credit is and how much the earned income tax credit can be for you, you need to understand the process to claim it. 

The first step on your list is to file a 1040 form when you do your taxes. You also need to file a Schedule EIC form for any qualifying child or dependent. 

If you choose to claim your earned income tax credit, the IRS won’t be able to issue your refund until the middle of February. Most people should receive a direct deposit for their earned income tax credit by March 1st. You can track your credit through the IRS for an exact delivery date. 

Alternatives to the earned income tax credit 

If you make even just a few dollars over the maximum income for receiving an earned income tax credit, you will not qualify. So, if you’re financially struggling, there are other options you could consider. 

1. Payday Loans 

Payday Loans, or Cash Advances, are short-term, small-dollar loans. These are usually a couple of hundred dollars, and you’ll need to pay them back by your next paycheck. If you need some cash to hold you over until you get paid, a Payday Loan may be worth considering. 

2. Installment Loans 

With Installment Loans, you receive a lump sum of money upfront. You then pay it back over time via fixed monthly payments or installments. If you want a large amount of money at once, an Installment Loan could make sense. 

3. Title loans 

Car title loans are secured loans that use your vehicle as collateral. Once you get approved, you’ll give the lender your title in exchange for cash, which will be based on your car’s value. You can continue to drive your vehicle as you repay your loan. 

4. Lines of Credit 

Lines of Credit are flexible loans that are similar to credit cards and may be a good choice if you prefer a flexible form of financing. You’ll be able to borrow as much or as little as you’d like up to the approved credit limit. When you pay back your loan, you’ll only pay interest on the amount you borrowed. 

Tax season can creep up on you fast. So, it’s wise to start the claiming process of your earned income tax credit or start applying for a loan option sooner rather than later.