How to Tell If You Qualify for the Earned Income Tax Credit

The Earned Income Tax Credit (EITC) is a refundable federal income tax credit that can reduce the amount of taxes you owe and may also give you a refund. The EITC is intended to help low- to moderate-income workers and families. Last year, the average amount of EITC received nationwide was about $2,541. But the IRS says there are still millions of people not taking advantage of this valuable credit.

How does the earned income tax credit work? 

The earned income tax credit (EITC) is primarily designed to provide financial assistance to working families with children. For returns filed in 2024, you can qualify for as much as $7,430, depending on your marital status, income, and number of children. (People without children can also qualify, albeit for a lower amount.)

Note that unemployment income does not count as earned income, so it can’t be included as part of your calculation.

The great thing about this particular credit is that it’s refundable, which means that if the credit exceeds the taxes you owe, you get the rest paid out as a refund.

Why don’t more people claim the credit?

Many low-income individuals don’t file income tax returns in the first place—it’s not required for when you make less than $13,850—so they simply don’t know about it.

Also, the credit might be the most complicated of all the tax credits to calculate, as it uses complicated rules and formulas that aren’t easy to understand. Eligibility is determined by a mix of income type (with a cap on investment income), marital status at the end of the year, citizenship status, and how many kids you have, where they live, and their age. Plus, eligibility can change from year to year.

How to determine if you qualify for the EITC

The quickest, easiest way to determine eligibility is by using the EITC Assistant on the IRS page. The site takes you step by step through all of the eligibility criteria in the format of a questionnaire, followed by a calculation of how much you might be owed.

Also consider using the IRS’ Free File program, which, in partnership with private tax preparation companies, offers free software that will calculate and process your EITC claim. Of course, if at any point you feel uncomfortable using software to claim credits, it might be worth hiring someone to do your taxes for you.

Lastly, consider the Volunteer Income Tax Assistance program, known as VITA, which offers in-person services at various locations throughout the country.