The Earned Income Credit (EIC) is one of the most popular tax credits offered by the IRS. It is a refundable tax credit – taxpayers are eligible for refunds if their tax credit exceeds their tax liability for the year. But there are several requirements you must meet to get the EIC.
Qualifications to be eligible for Earned Income Credit
Earned income
You must have taxable earned income. Earned income includes your wages get by working for someone, income from your business, or the farm you own.
Here are the types of earned income
- Wages, salary, or tips (you get a W-2 at the end of the year)
- Income from a job where your employer didn’t withhold tax (such as gig economy work) including:
- Driving a car for booked rides or deliveries (Uber, Lyft, etc.)
- Selling goods online (Ebay, Facebook, etc.)
- Providing creative or professional services
- Money made from self-employment, including if you:
- Own or operate a business or farm
- Are a minister or member of a religious order
- Are a statutory employee and have income
- Benefits from a union strike
Earned income does not include:
- Pay you got for work when you were an inmate in a penal institution
- Interest and dividends
- Pensions or annuities
- Social Security
- Unemployment benefits
- Alimony
- Child support
Social security number required
To claim EIC, you need a social security number for you, your spouse, and any qualifying child. The social security number must be
- Valid for employment
- Issued before the due date of your tax return
- Individual taxpayer identification numbers (ITIN) and Adoption taxpayer identification numbers (ATIN) are not accepted
Filing Status
Filing status can be any status except ” married filing separately”
Qualifying for EIC (with or without children)
You have qualifying children or you and your spouse (if filing a joint return)
- Meet all EIC requirements
- Cannot be claimed as a dependent or qualifying child on anyone else’s return, and
- Are between 25 and 65 years old on Dec 31st of the tax year
Qualifying children for EIC
Age
A qualifying child
- Can be any age and permanently and totally disabled at any time during the year
- Must be under the age of 19 at the end of the year and younger than you (or your spouse, filing a joint return)
- Under the age of 24 at the end of the year, be a full-time student, and younger than you (or your spouse, filing a joint return)
Relationship
A qualifying child must be
- Son, daughter, stepchild, adopted child or foster child
- Brother, sister, half-brother, half-sister, stepsister or stepbrother
- Grandchild, niece or nephew
Residency
To qualify for EIC, your child must live with you (or your spouse, if you file a joint return) in the United States for more than half of the tax year.
Joint Return
You cannot claim EIC for your child if the child can file a joint return with another person.
Income limit thresholds for 2022
| Number of children | Max AGI, single or head of household filers | Max AGI, married joint filers |
|---|---|---|
| No child | $16,480 | $22,610 |
| 1 child | $43,492 | $49,622 |
| 2 children | $49,399 | $55,529 |
| 3+ children | $53,057 | $59,187 |
Maximum EIC credit amount for 2022
- $560 if you have no qualifying children
- $3,733 if you have one qualifying child
- $6,164 if you have two qualifying children
- $6,935 if you have three or more qualifying children
Must be US citizen or resident alien
To claim EIC, you and your spouse must be a citizen or a resident alien. If you or your spouse is a nonresident alien for part of the year, you can only claim EIC if you are filing jointly and you or your spouse is
- US Citizen with a valid Social Security number
- A Resident alien who was in the U.S. at least 6 months of the year you’re filing for and has a valid Social Security number
Investment income limitations
For 2022, your taxable investment income must be $10,300 or less
Foreign earned income limitations
You must not file Form 2555 and must have lived in the US for more than 6 months
Claiming both EITC and Child Tax Credit
It is possible to claim both EIC and Child Tax Credit in the same tax filing year as long as you meet the requirements for both.
Earned Income Credit is calculated on form 1040 automatically when you prepare your taxes. But you can use the IRS EITC Assistant to check if you meet all the criteria to get EIC for a given year.
