What is the Earned Income Credit (and do I qualify?)

The Earned Income Tax Credit is designed to provide financial assistance to low- to-moderate wage earners through a refundable tax credit. This video describes what the Earned Income Credit is, who qualifies for it, and how to claim it.

2024 UPDATE:

The maximum Credit, by number of qualifying children:
0 QC's: $632
1 QC: $4,213
2 QC's: $6,960
3 QC's: $7,840

The Maximum Earned Income/AGI to qualify for the credit:
0 QC's: $25,551 (MFJ); $18,591 (S, HOH, QSS)
1 QC: $56,004 (MFJ); $49,084 (S, HOH, QSS)
2 QC's: $62,688 (MFJ); $55,768 (S, HOH, QSS)
3 QC's: $66,819 (MFJ); $59,899 (S, HOH, QSS)

The investment income limit is $11,600 for 2023

The Earned Income Credit was significantly different for 2021, especially for those without qualifying children. If you're preparing a 2021 return, click here:    / lglaog8pvs  

To define a dependent, click here:    • Who qualifies as a dependent?  

To see what earned income is, click here:    • What is Earned Income (and why it's import...  

To learn when you can use your 2019 Earned Income to compute your 2020 or 2021 Earned Income Credit, click here:    • Using your 2019 earned income to calculate...  

Resources:

IRS Publication 17: "Your Federal Income Tax": https://www.irs.gov/pub/irs-pdf/p17.pdf

IRS Publication 596: "The Earned Income Credit" (contains the EIC lookup tables and Worksheet "A"): https://www.irs.gov/pub/irs-pdf/p596.pdf

IRS Form 2555: "Foreign Earned Income": https://www.irs.gov/pub/irs-pdf/f2555...

IRS Schedule EIC: "Earned Income Credit": https://www.irs.gov/pub/irs-pdf/seic.pdf

IRS: "What Members of the Military Should Know about the Earned Income Credit": https://www.irs.gov/newsroom/what-mem...

Nerdwallet.com: "Earned Income Tax Credit (EIC): What is is and how to Qualify": https://www.nerdwallet.com/article/ta...

Tax Policy Center: "What is the earned income tax credit?": https://www.taxpolicycenter.org/brief...

Intro and background music: “Bluesy Vibes” - Doug Maxwell - YouTube Audio Library

DISCLAIMER:

The information presented in this video is for informational and educational purposes only, and is not intended to render tax advice for specific situations. If you have questions about your specific tax situation, please consult the resources linked above or consult with a qualified tax professional in your community.

The information contained in this video is based on tax law and IRS regulations as of the date of publication, and may be subject to change.