To get in on the Earned Income Tax Credit (EITC) fun, there are a few criteria you need to meet. First off, you (or your spouse, if filing jointly) must earn income from a job or self-employment, think wages, salaries, tips, and net earnings from self-employment, or be a full-time student or disabled during the tax year. Your income has to fit within certain thresholds based on your filing status, how many qualifying children you have, and investment income so keep an eye on those limits.
You’ll also need a valid Social Security number, have lived in the US for over half the year, and can’t be claimed as a dependent by someone else. If you have qualifying children, they should meet specific age, relationship, residency, and joint return rules.
Qualifying children for the EITC must meet the following age requirements:
Under 19 and younger than you (or your spouse, if filing jointly).
Under 25 at the end of the year and a full-time student for at least 5 months.
Even if you’re flying solo without kids, you might still snag the credit if you meet the age and income requirements.
Taxpayer age requirements
There is no age requirement if you have qualifying dependents.
The age requirements for taxpayers without a qualified dependent to claim the EITC are:
You or your spouse (if married filing jointly) must be at least 25 or under the age of 65.
If you’re married filing jointly, you or your spouse will need to meet the age requirements to qualify.
All in all, this is a great way to give your tax refund a little extra boost!
Earned Income
The federal Earned Income Tax Credit (EITC) is designed to provide a tax break for low- and moderate-income workers, making earned income a key factor for eligibility. You can earn income in a couple of ways: through traditional employment where you receive wages, or by running your own business or farm. Understanding both the qualifying and non-qualifying income types will help you navigate your eligibility for the EITC effectively.
To qualify for the EITC, consider these sources of income:
Wages, salaries, tips, and other taxable compensation from traditional employment
Net earnings from self-employment, which includes profits before any business tax deductions are taken
Income earned as an independent contractor if classified as a statutory employee; however, non-statutory independent contractors might still qualify
It’s equally important to know what the IRS excludes from earned income when determining EITC eligibility. Here are some types of income that don’t count as earned income:
Alimony and child support
Interest and dividends (investment income)
Nontaxable payments received for fostering a child
Pensions and annuities
Social Security and railroad retirement benefits, including disability benefits
Unemployment benefits, even if taxable
Veterans benefits, including VA rehabilitation payments
Welfare benefits
Workers’ compensation benefits
To snag that EITC, your earned income must fall within certain limits based on your filing status and the number of qualifying children you claim. As your income goes up, the credit phases out, but it’s still a fabulous way to keep more money in your pocket when tax time rolls around!
Income limitations
To qualify for the Earned Income Tax Credit (EITC) in 2024, your earned income must fall within specific thresholds based on your filing status, the number of qualifying children you claim, and your investment income. Here’s a breakdown of the income limits:
Single or Head of Household:
No qualifying children: Earned income must be less than $18,591
One qualifying child: Earned income limit is $49,084
Two qualifying children: The limit jumps to $55,768
Three or more qualifying children: You can earn up to $59,899
Married Filing Jointly:
No qualifying children: Your earned income must be less than $25,511
One qualifying child: The limit is $56,004
Two qualifying children: You can earn up to $62,688
Three or more qualifying children: The limit is $66,819
Investment income - This amount must be $11,000 or less.
Note: If you have foreign earned income and need to file Form 2555 you will not be able to claim the EITC.
If you need additional guidance for deciding if you qualify for the EITC you can use this EITC assistant tool provided by the IRS. By claiming the EITC, you typically expect your tax refund by early March, assuming you filed your return electronically, chose direct deposit, and have no issues with your return. The IRS takes extra time to process returns with the EITC to ensure accuracy and prevent fraud.
This content is provided for informational purposes only and should not be construed as tax, legal, financial, accounting, or other advice. Rules and regulations vary by location and are subject to change, so please consult with an expert if you need advice specific to you.
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