Earned Income Credit Table: Find Out If You Qualify

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When you earn a certain amount of income, you’re obligated to pay federal income taxes, which can take a bite out of your earnings. To ease your financial burden, the Internal Revenue Service offers various tax credits for which you might be eligible, such as the earned income tax credit — aka EITC.

The Taxpayer Certainty and Disaster Tax Relief Act of 2020 has provided taxpayers some EITC relief this year. If your earned income was higher in 2019 than in 2020, you are allowed to use your 2019 income to figure your credit for 2020, according to the IRS.

Here’s what you need to know about the EITC and whether you’re able to take advantage of it to reduce your tax liability.

Find Out: What Are the 2020-2021 Federal Tax Brackets and Tax Rates?

What Is Earned Income Tax Credit?

Earned income is money that you were paid for working for someone else or money that you made from running your own business or farm. In general, earned income can include:

  • Wages
  • Self-employment income
  • Union benefits
  • Long-term disability benefits received before reaching the minimum retirement age (but doesn’t include income like capital gains, dividends, alimony, Social Security or unemployment benefits)
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Each qualifying child you claim increases the earned income and adjusted gross income (AGI) limits.

Learn More: Tax Year Deadline Dates You Need To Know

Earned Income Tax Credit Income Limits

The earned income tax credit is only available if your income doesn’t exceed certain limits, some of which are based on your filing status and the number of qualifying children you claim. This table breaks down the earned income and AGI limits:

2020 Tax Year Earned Income Tax Credit Income Limits  
If your filing status is: Number of Qualifying Children
0 1 2 3
Single $15,820 $41,756 $47,440 $50,594
Head of Household $15,820 $41,756 $47,440 $50,594
Surviving Spouse $15,820 $41,756 $47,440 $50,594
Married Filing Jointly $21,710 $47,646 $53,330 $56,844
Information accurate as of Feb. 19, 2021.

The earned income tax credit gives low-income taxpayers an extra credit on their tax return as a reward for earning income and helping support their families. The credit can increase for taxpayers with qualifying children. In fact, for some taxpayers, this tax break could be worth as much as $6,660.

Check Out: 8 New or Improved Tax Credits and Breaks for Your 2020 Return

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Do I Qualify for the Earned Income Tax Credit?

A tax credit is one of the quickest ways to reduce tax liability — it’s a direct reduction of the amount of tax owed. To qualify for the IRS earned income credit, you must have earned income during the year. Here’s what else you need to do in order to qualify:

  • Your investment income for the year cannot exceed $3,650.
  • You cannot file Form 2555, Foreign Earned Income.
  • Your filing status must not be married filing separately.
  • You must be a U.S. citizen or resident alien all year.
  • Neither your earned income nor your AGI can be higher than the limit for your filing status.

In addition, you, your spouse — if married — and any qualifying child you claim must have a valid Social Security number that was issued before the due date for filing your tax return, including any tax extensions for which you qualify.

Don’t Forget: All the New Numbers You Need To Know for Planning Ahead on Taxes

Filing Status and Rules for Qualifying Children

Your filing status must be one of the following: single, head of household, surviving spouse or married filing jointly. You can’t claim EITC if your tax filing status is married filing separately.

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Qualifying children aren’t limited to your biological children, and just because someone is your biological child doesn’t automatically mean he or she is your qualifying child. The qualifying child must meet the relationship test, age test, residency test and joint return test.

  • Relationship test: The child must be your biological or adopted child, stepchild, foster child, a descendant of any of your children, a sibling, half sibling, step-sibling or a descendant of any of your siblings.
  • Age test: The child must be younger than you or your spouse and either under 19 or, if a full-time student, under age 24. The person also meets the age test if he or she is permanently and totally disabled, regardless of age.
  • Residency test: The child must live with you in the U.S. for more than half of the year.
  • Joint return test: The person cannot file a joint tax return with a spouse unless the child’s spouse wasn’t required to file and only filed to obtain a tax refund.

Related: Things Every Parent Should Know About the Child Tax Credit

Claiming the Credit With No Qualifying Children

You’re not required to have qualifying children to benefit from the EITC. Although the credit will be limited, you can still claim it as long as you meet the basic criteria as well as these additional criteria: [7]

  • You lived in the U.S. for more than half the year.
  • No one else can claim you as a dependent or qualifying child on their income tax return.
  • You are younger than 65 and at least 25 at the end of the year.

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Cynthia Measom contributed to the reporting for this article. 

Last updated: Feb. 19, 2021

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About the Author

Michael Keenan is a writer based in the Kansas City area, specializing in personal finance, taxation, and business topics. He has been writing since 2009 and has been published by Quicken, TurboTax and The Motley Fool.
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