Concise Takeaway
The Earned Income Credit is a refundable credit for workers with low to moderate earned income. Eligibility depends on earned income, AGI, investment income limits, SSN requirements, and whether the taxpayer has qualifying children.
What the EIC Is
The EIC reduces tax and may generate a refund even if no tax is owed. Taxpayers with qualifying children use Schedule EIC to report child information.
The credit amount depends on:
- Earned income amount
- Phaseout thresholds
- Completed phaseout amounts
- Number of qualifying children
2025 Earned Income Credit Amounts
|
Qualifying Children |
Max Credit |
Earned Income Amount |
Phaseout (MFJ) |
Completed Phaseout (MFJ) |
Phaseout (Others) |
Completed Phaseout (Others) |
|
None |
$632 |
$8,490 |
$17,730 |
$26,214 |
$10,620 |
$19,104 |
|
One |
$4,328 |
$12,730 |
$30,470 |
$57,554 |
$23,350 |
$50,434 |
|
Two |
$7,152 |
$17,880 |
$30,470 |
$64,430 |
$23,350 |
$57,310 |
|
Three or more |
$8,046 |
$17,880 |
$30,470 |
$68,675 |
$23,350 |
$61,555 |
EIC is based on the lower of earned income or AGI.
What Counts as Earned Income
Earned income includes:
- Wages, salaries, tips
- Net earnings from self‑employment
- Union strike benefits
- Long‑term disability payments received before minimum retirement age
- Nontaxable combat pay (if elected)
Earned income does not include:
- Interest, dividends
- Pensions
- Social Security
- Unemployment
- Alimony
- Child support
- Pay for work while incarcerated
General EIC Eligibility Rules
To claim the EIC, taxpayers must meet all of the following:
- Investment income ≤ $11,950 (2025)
- Valid SSN for taxpayer, spouse, and qualifying children
- U.S. citizen or resident alien all year
- Cannot file Form 2555
- Cannot be the qualifying child of another person
- Must have earned income below the completed phaseout amount
- Generally must file MFJ if married, unless meeting the separated spouse rule
Separated Spouse Rule
A married taxpayer may be treated as unmarried if:
- Does not file jointly
- Lives with a qualifying child more than half the year
- Does not share a principal residence with spouse for the last 6 months, or
- Has a written separation agreement and does not live with spouse at year‑end
Rules for Taxpayers With No Qualifying Children
To claim the childless EIC, taxpayers must:
- Be age 25–64
- Live in the U.S. more than half the year
- Not be a dependent of another person
Rules for Taxpayers With Qualifying Children
A qualifying child must meet all four tests:
- Relationship Test
Child must be:
- Son, daughter, stepchild, foster child, adopted child, or descendant
- Brother, sister, half sibling, step sibling, or descendant
- Age Test
Child must be:
- Under age 19, or
- Full‑time student under age 24, or
- Permanently and totally disabled (any age)
- Residency Test
Child must live with the taxpayer in the U.S. more than half the year.
- Joint Return Test
Child cannot file a joint return unless only to claim a refund.
When More Than One Person Can Claim the Child
If multiple taxpayers claim the same child:
- The child goes to the parent the child lived with the longest
- If equal time, the parent with the higher AGI claims the child
EIC Flow Summary
- Determine earned income and AGI
- Confirm investment income ≤ $11,950
- Apply SSN and residency rules
- Determine qualifying children
- Use EIC tables to compute credit
- File Schedule EIC if claiming children