The Earned Income Tax Credit

How the EITC works

The EITC reduces the amount of tax you owe. It is refundable — if the credit exceeds what you owe, you get the rest as a refund. That means even workers who owe no tax can receive thousands of dollars back.

The credit amount depends on three things:

1. Your earned income (wages, self-employment income, certain disability benefits)
2. Your filing status (single, married filing jointly, head of household)
3. Number of qualifying children (0, 1, 2, or 3+)

Maximum federal EITC amounts (2024 tax year — file in 2025)

• No qualifying children: up to $632
• 1 qualifying child: up to $4,213
• 2 qualifying children: up to $6,960
• 3 or more qualifying children: up to $7,830

These are maximums. Actual credit varies based on income. Amounts update annually for inflation — check IRS EITC for the current year.

Income limits (2024 tax year)

To qualify for any EITC amount, adjusted gross income must be below the following thresholds. Amounts differ by filing status and number of qualifying children.

• No children, single: under approximately $18,591
• No children, married filing jointly: under approximately $25,511
• 1 child, single: under approximately $49,084
• 1 child, married filing jointly: under approximately $56,004
• 3+ children, single: under approximately $59,899
• 3+ children, married filing jointly: under approximately $66,819

Investment income must also be below approximately $11,600 to qualify.

Who is a qualifying child

A qualifying child must:

• Be your son, daughter, stepchild, foster child, sibling, half-sibling, step-sibling, or a descendant of any of these
• Be under age 19, or under 24 if a full-time student, or permanently and totally disabled (any age)
• Have lived with you in the United States for more than half the tax year
• Not have filed a joint return (except to claim a refund)

Children born or adopted during the year can qualify if they lived with you the rest of the year.

Requirements for all filers

• You must have valid Social Security Numbers for yourself, your spouse (if filing jointly), and all qualifying children (ITIN does not qualify for federal EITC)
• You must be a U.S. citizen or resident alien for the entire tax year
• You must file a tax return (Form 1040), even if you owe no tax
• You cannot file Form 2555 (foreign earned income)
• You must have earned income from working — unemployment, Social Security, and alimony do not count

Illinois EITC

Illinois has its own EITC equal to 20% of the federal EITC (rate set by state law; check current rate). You claim it on your Illinois tax return (Form IL-1040), Schedule IL-E/EIC. Illinois EITC is also refundable — you get it even if you owe no state tax.

A family getting $6,000 in federal EITC would get another $1,200 from Illinois.

Free tax preparation

Filing a tax return to claim EITC does not cost you anything. Paid preparers sometimes charge high fees or push refund-anticipation loans. Free options are widely available:

• VITA (Volunteer Income Tax Assistance). IRS-sponsored free tax prep for households earning under approximately $67,000, persons with disabilities, and limited-English-speaking taxpayers. Find a site at IRS VITA locator.
• Ladder Up (Center for Economic Progress in Chicago). Free tax prep and financial counseling. goladderup.org.
• AARP Tax-Aide. Free tax prep, especially for older adults. aarp.org/taxaide.
• IRS Free File. Free online tax software for households earning under approximately $84,000. irs.gov/freefile.

Claiming prior-year EITC

If you missed the EITC in a prior year, you can still claim it by filing or amending returns for up to 3 years back. For tax year 2021 (filed in 2022), the deadline to amend is generally April 15, 2025. For tax year 2022, amend by April 15, 2026. Many people leave thousands of dollars unclaimed by not filing back returns.

Common reasons eligible people don't claim EITC

• They didn't file a return because their income was too low to require filing
• They filed but didn't know they qualified
• They were afraid of IRS scrutiny (the EITC is audited more than other credits, but properly-claimed EITC is low risk)
• A paid preparer charged high fees that ate into the refund
• Life changes (marriage, divorce, new child, change in employment) affected their eligibility

The IRS estimates that about 20% of eligible households miss EITC each year. If you worked and earned low-to-moderate income, check your eligibility — the claim is almost always worth more than the time it takes.

Other refundable credits to check

• Child Tax Credit — up to $2,000 per qualifying child, $1,700 of it refundable (2024 tax year)
• Credit for Other Dependents — $500 per dependent who doesn't qualify for the CTC
• Child and Dependent Care Credit — for child care expenses that let you work
• American Opportunity Tax Credit — for post-secondary education expenses, up to $2,500 with 40% refundable
• Premium Tax Credit — if you bought health insurance through the marketplace