It’s nice to work hard and get a bit of a break at tax time. The Earned Income Tax Credit (EITC) does exactly that for workers who earn a lower income, giving back some of the taxes these workers paid. It’s refundable, so eligible taxpayers without a tax liability can receive money back from the credit.

Eligibility

It’s a common misconception that only parents qualify for the EITC. You don’t have to have children to be eligible for the credit, although being a parent will increase the amount you receive. Taxpayers without kids can claim up to $506 of the EITC if they meet all other requirements.

This year, the maximum credit for working taxpayers who are parents to one child is $3,373. Having two children raises the credit amount to $5,572, while three or more children has a cap of up to $6269. Each year, the maximum credit amount is adjusted for inflation.

Taxpayers must have earned income, but that income is subject to certain limitations, and is dependent on filing status. Refer to the chart below to determine:

• Single filers must have adjusted gross income less than:
• $14,880 – no children
• $39,296 – one child
• $44,648 – two children
• $47,955 – Three or more children

• Married filing jointly must have adjusted gross income less than:
• $20,430 – no children
• $44,846 – one child
• $50,198 – two children
• $53,505 – Three or more children

Taxpayers with AGI that is the same as the above limits, or those with earned income higher than the threshold do not qualify to claim the EITC.

Earned income includes wages and salaries, along with self-employment earnings, and investment earnings. Special note regarding investment income: If you earn more than $3,400 in investment income, you are not able to claim the credit.

If you are married, but chose to file your return separately from your spouse, you are not able to claim the credit. If you are eligible to use the Head of Household status, because your spouse didn’t live with you for the final six months of the tax year, you may still qualify for the credit.

Childless Taxpayers

Those who do not have children may still qualify for the credit provided they meet the following three requirements:

• During the year the credit is being claimed, the taxpayer must be between the ages of 25 and 64 years old by the end of the year.
• Taxpayers cannot be dependents of any other taxpayer.
• Taxpayers must live in the United States for more than 6 months of the year.

Eligible Children

In order to use a child as a basis for claiming the credit, taxpayer’s must first ensure the child meets the standards for qualifying. Each child must be less than 19 years old, unless the child is a full-time student or permanently disabled.

Additionally, the child must meet the relationship test. A qualifying child must be the taxpayer’s son, daughter, adopted child, stepchild, or grandchild. If your sibling or step-sibling or their children or grandchildren may qualify if the taxpayer claiming the credit cared for that relation as if they were a child of their own.

Any child claimed as part of the EITC must have lived with the taxpayer making the claim for more than half of the tax year.