How Does the Earned Income Tax Credit Work?
The Earned Income Tax Credit (EITC) turns 50 this year—and the IRS is urging eligible taxpayers not to leave money on the table. Since its creation in 1975, this credit has helped millions of working Americans reduce their tax burden or receive larger refunds.
On March 29, 2025, the IRS celebrates five decades of EITC, now one of the country’s largest anti-poverty programs.
What Is the Earned Income Tax Credit?
The EITC is a refundable tax credit designed to support low-to-moderate income workers and families. Whether you have children or not, you could qualify for financial relief that reduces the tax you owe—or increases your refund.
In 1975, the maximum EITC was just $400. Today, the credit can be worth up to $7,830 depending on your income and number of dependents.
In tax year 2024 alone, 23 million households received over $64 billion through the EITC.
Who Qualifies for the EITC?
Eligibility is based on your income, filing status, and number of qualifying children. To claim the credit, you must:
- Have earned income from a job or self-employment
- File a federal tax return using Form 1040 or 1040-SR
- Meet the IRS income limits based on your family size
- Have a valid Social Security number
- Not be claimed as a dependent by someone else
You don’t need children to qualify. However, those with children usually receive a larger credit. If you’re claiming kids, you’ll also need to file Schedule EIC with your return.
Use the EITC Qualification Assistant on IRS.gov to check your eligibility.
How to Claim the EITC
To get the Earned Income Tax Credit, you must:
- File a 2024 federal tax return
- Enter the EITC on the correct line (Line 27a of Form 1040)
- Include Schedule EIC if claiming qualifying children
- Choose direct deposit for the fastest refund
You can e-file for free using IRS Free File or fillable forms online.
Warning: Refunds May Be Delayed
If you claim the EITC or Additional Child Tax Credit, the IRS cannot issue your refund before mid-February by law. Most refunds are processed by March 3 if filed early and error-free.
Avoid mistakes that can delay your refund—especially errors related to Social Security numbers, dependents, or filing status.
Missed the EITC in Previous Years?
You can still claim the credit for prior tax years—but only for three years after the filing deadline. Here’s the timeline:
- 2021 tax year: File by April 15, 2025
- 2022 tax year: File by April 15, 2026
- 2023 tax year: File by April 15, 2027
To do this, file a tax return for the missed year, or file an amended return (Form 1040-X) if you already filed but didn’t claim the credit.
Need Help Filing?
The IRS offers several ways to get help:
- Visit a Volunteer Income Tax Assistance (VITA) site
- Use the Interactive Tax Assistant on IRS.gov
- Work with a trusted tax professional
You may also qualify for other valuable credits, like:
- Child Tax Credit
- Education Credits
- Child and Dependent Care Credit
Check your eligibility using IRS tools to make sure you’re getting every dollar you’ve earned.
Bottom line: If you work and earn a moderate or low income, the Earned Income Tax Credit could put thousands of dollars in your pocket. The IRS wants you to know this credit has been helping Americans for 50 years—and it’s not too late to claim what’s yours.
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