Do I Qualify for the Earned Income Credit?

 

The Earned Income Credit (EIC) is a valuable credit for low-income taxpayers who work, but it can be difficult to understand the rules. You might be asking yourself, “Do I qualify for the Earned Income Credit?” 

Taking the time to check the EIC qualifications can pay off, as the tax benefit can be worth up to $6,431 for 2018 depending on your:

  • Filing status
  • Income
  • Number of qualifying children who can’t be claimed by another taxpayer

The EIC is refundable, so you can receive the credit as part of your refund, even if your tax has been reduced to $0. To qualify for the EIC, you must:

  • Have a valid Social Security number (SSN)
  • Not file as married filing separately
  • Be a U.S. citizen or resident alien all year
  • Not file a Form 2555 or Form 2555-EZ
  • Have investment income of $3,500 or less
  • Not be a dependent or qualifying child of another person
  • Have earned income

Earned Income Credit Qualifications If You Have No Children

If you don’t have qualifying children, to qualify for the Earned Income Credit you must:

  • Be at least 25 years old but younger than 65 at the end of 2018 
  • Not be a dependent of another taxpayer
  • Not be a qualifying child of another taxpayer
  • Live in the United States for more than half the year
  • Have earned income and adjusted gross income (AGI) of less than:
    • $15,270 if filing single
    • $20,950 if married filing jointly

Earned Income Credit Qualifications With One or More Children

To qualify for the Earned Income Credit, your child must meet these requirements:

Age — A qualifying child must be under age 19 or a full-time student under age 24. If your child is permanently and totally disabled, the age requirements don’t apply.

Relationship —A qualifying child must be one of these:

  • Son, daughter, stepson, stepdaughter, or eligible foster child
  • Brother, sister, stepbrother, stepsister, half-brother, or half-sister
  • A descendant of any of those people
  • These rules also apply to relationships:
    • Relationships established by marriage aren’t ended by death or divorce.
    • An adopted child is treated as your own child. An adopted child is any child legally placed with you for legal adoption.

Residency —The child must live with you in the same main home within the U.S. for more than half of the year. This doesn’t include Puerto Rico or other U.S. possessions.

Exceptions are allowed for:

  • Temporary absences
  • Children who were born or died during the year (if your home was the child’s home for over half of the time they were alive)
  • Kidnapped children
  • Those who are on extended active duty outside of the United States. They can be treated as having a main home within the United States. Extended active duty equals more than 90 days or for an indefinite period.

Citizenship — A qualifying child must be a U.S. citizen, U.S. national, or U.S. resident. A child who’s a resident of Canada or Mexico doesn’t qualify.

Dependency requirement — You don’t have to claim the child as a dependent. However, a married child is only a qualifying child for EIC purposes if you could claim their dependency exemption.

Marital status — A qualifying child must not file a joint return unless both of these are true:

  • They only file a return to claim a refund.
  • No tax liability would exist for either spouse if both of them had filed separate returns.

Social Security number (SSN) requirement —A qualifying child must have a valid SSN. These don’t qualify:

  • Adoption taxpayer identification number (ATIN)
  • Individual tax identification number (ITIN)

Filing status — You can’t be married filing separately.

Earned income —You must have earned income to meet the qualifications for the earned income credit. Unearned income (interest, sale of investments, pensions, and unemployment) doesn’t qualify for the credit. If you’re a military taxpayer with nontaxable combat pay, you can include the combat pay in income to calculate the EIC.

Income limit — Your earned income and AGI must be less than these limits:

  • With one qualifying child: $40,320, or $46,010 if married filing jointly
  • With two qualifying children: $45,802, or $51,492 if married filing jointly
  • With three or more qualifying children: $49,194, or $54,884 if married filing jointly

Investment income limit — For 2018, you can only claim the EIC if your investment income is $3,500 or less. Investment income includes:

  • Interest
  • Dividends
  • Capital gains
  • Royalties
  • Rental income
  • Passive activity income

Related Topics

Related Resources

Deduct Medical Expenses Paid With Loan

Learn whether you can deduct medical expenses paid with a loan or credit card from your federal return with advice from the tax experts at H&R Block.

What Is Schedule A Tax Form? And How Does It Relate to Itemized Deductions?

For individual taxpayers, Schedule A is used in conjunction with Form 1040 to report itemized deductions. If you choose to claim itemized deductions instead of the standard deduction, you would use Schedule A to list your deductions. Your itemized total is then subtracted from your taxable income.

Non-Custodial Parent Tax Credit

Can both divorced parents claim head of household? Explore how custody affects taxes and find possible solutions. Get tax answers from H&R Block.

Rental Property Tax Deductions

If you rent out an apartment in your home, can you claim a deduction on the expenses related to the unit? Learn more from the tax experts at H&R Block