Earned Income Credit (EITC)

The Earned Income Tax Credit (EITC or EIC) is a refundable credit for low- to moderate-income workers, meaning it can generate a refund even if you owe no income tax at all — making it one of the largest anti-poverty tools in the federal tax code. The credit amount depends on three things: your earned income, your filing status, and the number of qualifying children you claim, with the credit generally growing larger as the number of qualifying children increases, up to a maximum of three or more.

The credit follows a three-stage shape: it phases in as your earned income rises from zero, plateaus at its maximum once you reach a certain income level, and then phases out as income continues climbing toward the upper eligibility limit. For 2025, the maximum credit ranges from roughly $649 for a worker with no qualifying children to $8,046 for a worker with three or more qualifying children. You claim the EITC by filing a tax return, even if you would not otherwise be required to file one, since it is only available by claiming it.

Eligibility depends on more than income alone — you need a valid Social Security number, earned income from wages or self-employment, and your investment income for the year must stay at or below $11,950 for 2025 or you lose eligibility entirely regardless of your earned income level. The EITC is frequently underclaimed, especially by workers without qualifying children, who often assume the credit is only for parents — it is worth checking eligibility every year, since income, marital status, and dependents can all change what you qualify for.