Taxes
4
min read

Do I Qualify For The Earned Income Tax Credit?

Learn how to qualify for the Earn Income Tax Credit (EITC) with or without claiming children or relatives on your tax return.
Published on
January 18, 2023
Presented by Givers
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Managing medical costs, groceries, housing, and utilities can overwhelm family caregivers. A family caregiver budget often has a quarter earmarked for the care recipient's needs. This might include covering gas for transportation to medical appointments, weekly groceries, or copays. The Earned Income Tax Credit helps low-income working families pay for necessities like food, housing, and medical needs. Created in 1975 by President Gerald Ford, the Earned Income Tax Credit helps many families make ends meet during difficult financial times.

Do I qualify for the Earned Income Tax Credit?

Low- to moderate-income workers with qualifying children might be eligible for the Earned Income Tax Credit (EITC) if they meet specific qualifying rules. The EITC allows for a qualifying child with permanent and total disability to be any age. You may qualify for the EITC even if you can't claim children on your tax return. 

You can claim the EITC without a qualifying child if you meet all the following requirements: 

You (and your spouse, if filing jointly) must:

  • Meet the basic EITC qualifying rules
  • Have your primary residence in the United States for more than half the tax year (includes the Washington D.C. and U.S. military bases; does not include the Virgin Islands, Guam, or Puerto Rico)
  • Not be claimed as a qualifying child on anyone else's tax return
  • Be between the ages of 25 and 65 (at least one spouse must meet this rule)

Households receive a refundable tax credit based on family size and earned income, and larger families receive bigger tax refunds based on the number of children in the household. In some cases, adult dependent children meet eligibility requirements, and children with a disability may meet eligibility for the Earned Income Tax Credit regardless of their age.

Types of earned income

  • Wages, salary, or tips on your W-2
  • Income from a job where there was no tax withholding (i.e., gig economy work)
  • Money made from self-employment
  • Benefits from a union strike
  • Some disability benefits you received before the minimum retirement age
  • Nontaxable combat pay 

Earned income does not include:

  • Pay for work as an inmate in a penal institution
  • Interest and dividends
  • Pensions or annuities
  • Social Security
  • Unemployment benefits
  • Alimony
  • Child support

The Earned Income Tax Credit does not take into consideration the following:

Qualifying rules

To qualify for the Earned Income Tax Credit, the following must be true:

The EITC has special qualifying rules for the militaryclergy, and taxpayers and their relatives with disabilities.

To be valid, a Social Security Number must be valid for employment and must be issued before the tax return due date (including extensions). Adoption taxpayer identification numbers (ATIN), individual taxpayer identification numbers (ITIN), and Social Security cards that read "Not Valid for Employment" are not accepted for the EITC.

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How does the Earned Income Tax Credit work?

The Earned Income Tax Credit reduces any taxes owed dollar-for-dollar. If the amount you should receive exceeds the total taxes owed, you will receive a refund. The refund might come in the form of a check or direct deposit. The amount received each year changes. Always double-check the updated requirements before filing taxes.

Do disabled adults qualify for the Earned Income Tax Credit?

Disabled adults of any age who have a permanent and total disability can qualify as a Qualifying Child to claim the Earned Income Tax Credit. The family caregiver must provide documentation from a licensed doctor that indicates that the adult dependent has a severe mental or physical illness that will last for more than a year or can result in death. They also must have a valid Social Security number, meet residency requirements, and any relationship eligibility rules.

As with any financial assistance, document all medical issues that impact gainful employment. Keep any documentation from hospital stays, physicians, and others who have close content with the individual. Keep all these files organized. Speak with your tax preparer about recommended legal documents for filing in case of an audit with the IRS. The Earned Income Tax Credit can significantly help a family caregiver's budget.

How to claim the Earned Income Tax Credit

Applying for the Earned Income Tax Credit can be completed when you file your yearly taxes. Calculate your overall earned income for the year. The tax forms have a chart to determine if you qualify. The IRS will deduct your Earned Income Tax Credit from any taxes you owe. Married couples need to file a joint return to apply for the credit.

Any refund will be sent to your home via check or direct deposit. In general, individuals receive direct deposit quicker than a check. If you have any questions, speak with your tax preparer about your eligibility for the Earned Income Tax Credit.

How to claim the Earned Income Tax Credit (EITC) >>

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How much is the Earned Income Tax Credit?

The Earned Income Tax Credit is one of the most popular tax credits because it helps working families pay for necessities and the high cost of family caregiving. Even if someone doesn't owe any taxes, they still receive money back from the government as a refund. For example, when you receive money through wages, salaries, or tips, you pay less in taxes. The amount of the reduction depends on how much you make and whether you owe any other taxes.

See the most recent income limits of the Earned Income Tax Credit >>

Other credits you may qualify for

If you qualify for the Earned Income Tax Credit, you may also be eligible for other tax credits, including the following:

Being a family caregiver for a child, disabled adult, or foster child requires a significant financial commitment. The Earned Income Child Credit gives low–income working families some relief in paying for basics like groceries, housing, and medical needs.

Once the credit is applied to any owed taxes, the refund amount is sent to families. They can use the money for whatever they need. Many families depend on this refund to make important large purchases like major appliances, a vehicle, or towards high medical bills. Ask your tax preparer how to apply for the Earned Income Tax Credit this upcoming tax season.

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