Earned Income Tax CreditEarned Income Tax Credit

The earned income tax credit is a refundable tax credit for low to moderate income families. In this article, we will go over the basics of the earned income tax credit.

Who Can File

To be able to file for the earned income tax credit, you must have made at least $1 of earned income during the year. There are maximum income requirements based on the number of children you are claiming and whether you are filing single or married filing jointly. Please see the chart below for these amounts for the 2024 tax year.

Number of Children Maximum Tax Credit Maximum AGI-Single Maximum AGI-Married
0 $632 $18,504 $25,511
1 $4,213 $49,084 $56,004
2 $6,960 $55,768 $62,688
3+ $7,830 $59,899 $66,819

In addition to income limits, there are other limits that will exclude you from qualifying for the earned income tax credit. First, is investment income. To qualify you cannot make more than $11,600. Second, you cannot have foreign income. This means you are ineligible if you file a Form 2555 or 2555-EZ. Lastly, you must be between the ages of 25 and 65. If you are married only one spouse needs to meet the age requirement.

Qualifying Child

To claim a child for the earned income tax credit they must meet certain requirements. First, they must have the proper relationship to you. This would include biological children, adopted children, stepchildren, foster children, and grandchildren. You can also claim a sibling, half sibling, stepsibling or any of their children. Second, they must meet the age requirement. This means the child can be no older than 18 at the end of the year. The child you are claiming must be younger than you and your spouse. If the child is a full time student the age cut off extends to 24. It is important to note that if the child is permanently and totally disabled there is no age requirement. Lastly, the child must have lived with you in the United States for more than half of the year.

How to Claim

You claim the earned income tax credit on your Form 1040. If you are claiming qualifying children, you must also fill out a Schedule EIC. On this form you will provide additional information about the children you are claiming.

Consequences of Errors

Errors when claiming the earned income tax credit have varying levels of consequences. The first is you may be required to pay back any amount of the credit you received in error, plus interest. Second, in the future you may be required to file a Form 8862 before you can claim the earned income tax credit again. Third, if your rejection is the result of a “reckless or intentional disregard of the rules” you can be banned from claiming the EITC for 2 years. Last, if you file for the EITC fraudulently, you will be banned from claiming it for 10 years.

Filing Your Taxes

If you are unsure of how to claim the EITC you can meet with a qualified tax preparer to help you complete the forms correctly.

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