Earned Income Tax Credit: DO I QUALIFY:

The Earned Income Tax Credit (EITC) is a tax credit for low- and moderate-income wage earners. For 2018, the credit ranges from $519 to $6,431 depending on your filing status and how many children you have. You don’t have to have a child in order to claim the EITC. Check out our quiz below for a quick read on whether you might qualify for the EITC.

The EITC doesn’t just cut the amount of tax you owe it could score you a refund, and in some cases a refund that’s more than what you actually paid in taxes. Don’t miss out! One out of five eligible workers fails to claim the EITC, and they could be losing out on hundreds or even thousands of dollars.

 Earned Income Tax Credit

  • The EITC is a tax credit intended to reduce or eliminate the tax paid by low- and moderate-income wage earners. In 2017, 26 million taxpayers claimed more than $63 billion in EITC, averaging more than $2,400 per return.
  • If you fall within the guidelines for the credit, be sure to claim it on your 2018 return when you do your taxes in 2019. And if you didn’t claim the credit when you filed your 2015, 2016 or 2017 taxes but you think you qualified for it, the IRS encourages you to let it know so you can get that money back.

How much can I get?

Below are the maximum EITC available for the 2018 tax year, plus the max you can earn before losing the benefit altogether.

2018 Tax Year Earned Income Tax Credit

Number of children Maximum credit Max earnings
single filers
Max earnings
married filers
0 $519 $15,270 $20,950
1 $3,461 $40,320 $46,010
2 $5,716 $45,802 $51,492
3 or more $6,431 $49,194 $54,884
  • In general, the less you earn, the larger the credit.
  • Typically families with children qualify for the largest credits, although you don’t have to have a child in order to claim the EITC.
  • Both your earned income and your adjusted gross income each have to be below certain levels that are based on your filing status and the number of qualified children you’re claiming (from none to three or more).
  • Your earned income usually includes job wages, salary, tips and other taxable pay you get from your employer. Your adjusted gross income is your earned income minus certain deductions.

One out of five eligible workers fails to claim the EITC.

Who qualifies for the EITC?

Besides staying below the income thresholds noted above, there are other rules.

  • You must have at least $1 of earned income (pensions and unemployment don’t count).
  • Your 2018 investment income must be $3,500 or less.
  • You can’t claim EITC if you’re married filing separately.
  • You must not file Form 2555, Foreign Earned Income; or Form 2555-EZ, Foreign Earned Income Exclusion.

There are special rules for members of the military and the clergy, as well as for people who have disability income or who have children with disabilities.

Kids and the EITC

If you claim one or more children as part of your earned income credit, each must pass certain tests to qualify:

  • The child can be your son, daughter, adopted child, stepchild, foster child or grandchild. The child also can be your brother, sister, half-brother or half-sister, stepbrother or stepsister or any of their children (your niece or nephew).
  • The child must be under 19 at the end of the year and younger than you or your spouse if you’re filing jointly, OR the child must be under 24 if he or she was a full-time student. There’s no age limit for kids who are permanently and totally disabled.
  • The child must have lived with you or your spouse in the United States for more than half the year.

For each child you’re claiming, you’ll also need:

  • A Social Security number (be sure to use the child’s name and Social Security number exactly as they appear on the Social Security card)
  • His or her birthdate

If you don’t have kids

You may be able to get the EITC if you don’t have a qualifying child but meet the income requirements for your filing status. To qualify, you must meet three more conditions:

  1. You must have resided in the United States for more than half the year.
  2. No one can claim you as a dependent or qualifying child on his or her tax return.
  3. You must be at least 25 but under 65 at the end of the year.

Contact Fornaris & Ledesma Accounting with questions regarding this Credit: