What is the Earned Income Credit (EIC), How to Qualify, and What Changed for 2023 vs. 2024?

The Earned Income Credit (EIC) is a financial boost for workers and families, especially those with lower or moderate incomes. Not only does it reduce the amount of taxes you owe, but it can also result in a cash refund if the credit exceeds your tax liability. Understanding the qualifications, including income limits, can help you claim the full benefit you deserve.

What is the Earned Income Credit (EIC)?

The EIC is a refundable tax credit designed to reward working individuals and families for earning income. The credit amount depends on your income, filing status, and the number of qualifying children in your household.

Who Qualifies for the EIC?

To qualify, you must meet these requirements:

1. Earned Income Requirement: You must have earned income, such as wages, salaries, tips, self-employment income, or certain disability benefits. Investment income is capped at $11,000 for 2023 and $11,500 for 2024.

2. Filing Status:

   • Qualifies: Single, Head of Household, Married Filing Jointly, or Qualifying Widow(er).

   • Does NOT Qualify: Married Filing Separately.

3. Income Limits: Your adjusted gross income (AGI) must fall below specific thresholds, which depend on your filing status and the number of qualifying children.

4. Age Requirements:

   • If claiming the EIC without children, you must be between 25 and 65 years old.

   • If claiming the EIC with children, there is no age limit.

5. Residency: You must live in the United States for more than half the year.

6. Valid Social Security Numbers: You, your spouse (if filing jointly), and your qualifying children must all have valid Social Security Numbers.

Income Limits for the EIC in 2023 and 2024

To claim the credit, your earned income and adjusted gross income (AGI) must be below these thresholds:

Filing Status and Children	2023 Income Limit	2024 Income Limit
No Children	$17,640 (Single) / $24,210 (Married)	$18,591 (Single) / $25,511 (Married)
One Child	$46,560 (Single) / $53,120 (Married)	$49,084 (Single) / $56,004 (Married)
Two Children	$52,918 (Single) / $59,478 (Married)	$55,768 (Single) / $62,688 (Married)
Three or More Children	$56,838 (Single) / $63,398 (Married)	$59,899 (Single) / $66,819 (Married)

How Much Can You Receive?

The EIC amount you receive depends on your income and family size. Here’s how it breaks down for 2023 and 2024:

Number of Children	2023 Maximum Credit	2024 Maximum Credit
No Children	$600	$632
One Child	$3,995	$4,213
Two Children	$6,604	$6,960
Three or More Children	$7,430	$7,830

Example: How the EIC Works

Imagine you're a single parent with two children, and you earned $30,000 in 2024.

• Step 1: The income limit for two children as a single filer is $53,865. Since your income is below this, you qualify.

• Step 2: Check the maximum credit for two children in 2024: $6,640.

• Step 3: Your income is in the phaseout range, so your credit will be reduced slightly but could still amount to approximately $5,000.

Why Does the EIC Change Yearly?

The IRS adjusts the credit amounts and income thresholds annually for inflation. This ensures the EIC continues to provide meaningful support to working families.

How to Claim the Earned Income Credit

1. File Your Tax Return: The EIC isn’t automatic—you must file a tax return to claim it.

2. Attach Schedule EIC: If you’re claiming qualifying children, complete and attach Schedule EIC to your Form 1040.

3. Provide Accurate Details: Double-check Social Security Numbers and residency details to avoid delays or rejections.