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.
2023 UPDATE:
The maximum Credit, by number of qualifying children:
0 QC's: $600
1 QC: $3,995
2 QC's: $6,604
3 QC's: $7,430
The Maximum Earned Income/AGI to qualify for the credit:
0 QC's: $24,210 (MFJ); $17,640 (S, HOH, QSS)
1 QC: $53,120 (MFJ); $46,560 (S, HOH, QSS)
2 QC's: $59,478 (MFJ); $52,918 (S, HOH, QSS)
3 QC's: $63,398 (MFJ); $56,838 (S, HOH, QSS)
The investment income limit is $11,000 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 dep...
To see what earned income is, click here: • What is Earned Income ...
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...
Resources:
IRS Publication 17: "Your Federal Income Tax": www.irs.gov/pub/irs-pdf/p17.pdf
IRS Publication 596: "The Earned Income Credit" (contains the EIC lookup tables and Worksheet "A"): www.irs.gov/pub/irs-pdf/p596.pdf
IRS Form 2555: "Foreign Earned Income": www.irs.gov/pub/irs-pdf/f2555...
IRS Schedule EIC: "Earned Income Credit": www.irs.gov/pub/irs-pdf/seic.pdf
IRS: "What Members of the Military Should Know about the Earned Income Credit": www.irs.gov/newsroom/what-mem...
Nerdwallet.com: "Earned Income Tax Credit (EIC): What is is and how to Qualify": www.nerdwallet.com/article/ta...
Tax Policy Center: "What is the earned income tax credit?": www.taxpolicycenter.org/brief...
The Tax Geek on The Site Formerly Known as Twitter: @taxgeekusa
The Tax Geek on Reddit: www.reddit.com/r/askataxgeek
Intro and background music: “Bluesy Vibes” - Doug Maxwell - KZbin 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.

[@TheTaxGeek]

2023 UPDATE: The maximum Credit, by number of qualifying children: 0 QC's: $600 1 QC: $3,995 2 QC's: $6,604 3 QC's: $7,430 The Maximum Earned Income/AGI to qualify for the credit: 0 QC's: $24,210 (MFJ); $17,640 (S, HOH, QSS) 1 QC: $53,120 (MFJ); $46,560 (S, HOH, QSS) 2 QC's: $59,478 (MFJ); $52,918 (S, HOH, QSS) 3 QC's: $63,398 (MFJ); $56,838 (S, HOH, QSS) The investment income limit is $11,000 for 2023

[@IIIShizzyIII]

omg. thank you for providing resources. I need to do a project on credits and I need to read through the irs site. Nice to have a link to references to put things in my own thoughts!

[@TheTaxGeek]

Glad it was helpful!

[@Laz3rCat95]

Thank you for these useful resources. I wish this stuff was taught to me in school.

[@TheTaxGeek]

You're very welcome. I, too, wish that a basic understanding of the tax system was taught in schools.

[@javiervidal7508]

Thanks

[@TheTaxGeek]

No problem

[@Itssantiagodiaz]

nice!

[@TheTaxGeek]

Glad you liked it!

[@Itssantiagodiaz]

@@TheTaxGeek heck yeah, I’m in my income tax 1 class this semester!

[@christinalaliberty1788]

If you already filed your yearly taxes, are you able to refill for eitc

[@TheTaxGeek]

Yes, If you believe you would be eligible for EIC (or any tax benefit, for that matter), you can amend your tax return to claim it up to three years after the due date of the return.

[@chrissal3730]

Is EIC the same as the EITC?

[@TheTaxGeek]

Yes, the abbreviations are used interchangeably of the Earned Income (Tax) Credit.

[@Tempssavage]

I was getting a total refund of $1,032 I’m single I don’t have kids at all but the irs made changes to my taxes so now I’m going getting $232 back ??? I also check the( EIC ) and it says 1,209 has been credited to my taxes does that mean I’m getting that amount ?

[@TheTaxGeek]

What you probably have is a CP11 Notice, which is a notice the IRS sends out when it corrects an error it believes it made when you filed your return. To learn more about the CP11 Notice, check out this video: kzbin.info/www/bejne/baqafa2HirJ4aNE If you don't understand why the IRS changed your return, you probably should speak to a qualified tax professional in your community who can explain the notice to you, and if he or she believes you received the notice in error, can assist you in contesting it.

[@nabinshrestha6594]

Hi, I am full time single college student and I worked in one company for 20 hours per week for 2 month. Later, I got an letter from IRS saying I may be eligible for a refund of up to $1502. Can you tell me what I need to do?

[@TheTaxGeek]

If you're a full-time college student, you need to be over age 25 to claim an Earned Income Credit. If you already filed your taxes, you can amend your return to claim the EIC. You may also be eligible for up to $1,000 in American Opportunity Credit as well. If you're under 25, a student, or qualify as someone's dependent, you can't. The IRS probably doesn't know your student status and sent you that letter just in case you might qualify.

[@shawnreed4859]

I’m married filling together only income we have is va disability which is not taxable and my job that paid me 11,000. IRS only refunded me the 1800 child tax credit. However sent a letter saying they adjusting my return stating that there’s an issue on my 1040. When filling my Eic said I would get 3,600 back. I’m so confused and irs dose not answer. They gave me till may 13 to contact them.

[@TheTaxGeek]

With that situation you should have received some Earned Income Credit, plus $1,800 in child tax credit. I'm assuming you have one child under 7, which gives you a Child Tax Credit of $3,600, but you were already sent $1,800 of that credit in monthly installments in 2021. When preparing your taxes, you might not have told them you received the advance payments, and claimed the entire $3,600 by mistake. The IRS is merely correcting your refund to account for the payments they already sent you.

[@ghiea.1466]

Can a 19 yo fulltime student but have partime job and earned income of 10k plus qualifies for eitc if he files for himself or must include as dependent of his parents to claim the eic?

[@TheTaxGeek]

No. Without a qualifying child of your own, you cannot claim the Earned Income Credit until age 25. Also, if you're claimable as a dependent, you cannot take the Credit, even if you're not actually claimed.

[@ghiea.1466]

Hi what about the parents? Can they claim eic for their 19 yo son with partime job and earning of 10k plus but a fulltime student?'

[@trell019]

Sooo 100k people dont get it

[@lookingforwookiecopilot]

According to the letter I just got, I needed to be homeless in 2021 in order to get EIC, as "I had a principal place of abode in the US for 6 months or less" This doesn't make any sense to me, but oh well? :(

[@TheTaxGeek]

The IRS has sent out about 9 million letters to people who might be eligible for EIC or Recovery Rebate Credit for 2021, based on the information the IRS has received. The rules for EIC temporarily changed and more people were made eligible for EIC for 2021, primarily taxpayers with no children under 25 or over 65. The minimum age for EIC (without children) was reduced for 2021 to 19, but certain 18-year olds who have experienced homelessness may also qualify. Of course, the letter jumbles all this up in a confusing salad of words. These letters went out to those who didn't file tax returns (mainly because they were not required to file), or people who filed returns without EIC, and the IRS thinks they are eligible for it, again, based on the income information they have received. You may still qualify.

[@lookingforwookiecopilot]

@@TheTaxGeek All I know is they need to re-word that first question so that regular joes can understand what it is they are really asking.

[@javiervidal7508]

They hold my refund , I used my income 2019 was 28,000 because my 2020 44,000 the difference was 2,000 with two children, please help me . Thanks

[@TheTaxGeek]

Being able to use your 2019 earned income to claim Earned Income Credit is only allowed when your 2020 earned income is LOWER than the 2019 earned income. If your income was higher in 2020, you did not suffer any hardship in the eyes of the IRS. As a result, the IRS adjusted your EIC downward.

[@javiervidal7508]

@@TheTaxGeek in my tax 2020 , 25,000 was unemployment of 44,000 ,

[@DJSTOEK]

😷❤❤

[@kerrjason8537]

48k wont get it with 2 kids