The Earned Income Tax Credit (EITC) in the United States is a significant benefit for low- to moderate-income workers. If your income is below $63,398 in 2023, you might be eligible for this credit on your federal tax return for 2023 (filed in 2024), depending on your filing status and the number of qualifying children you have. The EITC can provide a substantial financial boost, with the amount of the credit varying based on these factors.

In 2023, the EITC can be worth up to $7,430 for workers with qualifying children. Even for those without children, the credit can be up to $600, which is still a meaningful amount. Importantly, the EITC is fully refundable, meaning if the credit exceeds the taxes you owe, you’ll receive the difference as a refund.

The EITC was introduced in 1975 as part of efforts to encourage employment and assist low-income working families, particularly those with children. It has since expanded to include middle-class families and, to a lesser extent, childless families.

How the EITC Works: The EITC reduces your tax liability and is refundable, meaning you receive a refund if the credit is greater than what you owe in taxes. In 2019, 79% of eligible individuals, about 23 million people, claimed the EITC, costing a total of $71 billion according to the Internal Revenue Service.

EITC Amounts for 2023: The amount of EITC you can receive in 2023 varies based on the number of children and your filing status. Here are the maximum credit amounts and income thresholds:

• No children: Up to $600 (Max AGI: $17,640 for single/head of household, $24,210 for married filing jointly)
• 1 child: Up to $3,995 (Max AGI: $46,560 for single/head of household, $53,120 for married filing jointly)
• 2 children: Up to $6,604 (Max AGI: $52,918 for single/head of household, $59,478 for married filing jointly)
• 3 or more children: Up to $7,430 (Max AGI: $56,838 for single/head of household, $63,398 for married filing jointly)

Eligibility for the EITC: To be eligible, you must have earned income and meet certain income limits. For the 2022 tax year, the income cap is $57,414. You also need to have a valid Social Security number and be a U.S. citizen.

EITC Payment Amounts: The EITC amount varies with income level. For the 2022 tax year, the maximum credit is $6,935 for families with three or more children, $6,164 for two children, $3,733 for one child, and $560 for those without children.

Claiming the EITC for a Previous Tax Year: Income limits for the EITC change annually, so you might be eligible now even if you weren’t before. You can use the Earned Income Tax Credit calculator for 2023 to determine if you qualify and estimate your credit amount before filing your tax return.