The Earned Income Tax Credit (EITC)

The Earned Income Tax Credit (EITC) helps low- to moderate-income workers and families get a tax break. If you qualify, you can use the credit to reduce the taxes you owe – and maybe increase your refund.

Who is eligible and what qualifies as Earned Income

To claim the Earned Income Tax Credit (EITC), you must have what qualifies as earned income and meet certain adjusted gross income (AGI) and credit limits for the current, previous, and upcoming tax years.

Find the maximum AGI, investment income and credit amounts for tax year 2023.

Types of Earned Income

  1. Wages, salary or tips where federal income taxes are withheld on Form W-2, box 1
  2. Income from a job where your employer didn’t withhold tax (such as gig economy work) including:
    • Driving a car for booked rides or deliveries
    • Running errands or doing tasks
    • Selling goods online
    • Providing creative or professional services
    • Providing other temporary, on-demand or freelance work
  3. Money made from self-employment, including if you:
  4. Benefits from a union strike
  5. Certain disability benefits you got before you were the minimum retirement age
  6. Nontaxable Combat Pay (Form W-2, box 12 with code Q)
Earned income does not include:
Find the maximum AGI, investment income and credit amounts for tax year 2023.

Maximum Credit Amounts The maximum amount of credit:

  • No qualifying children: $600
  • 1 qualifying child: $3,995
  • 2 qualifying children: $6,604
  • 3 or more qualifying children: $7,430
  • Pay you got for work when you were an inmate in a penal institution
  • Interest and dividends
  • Pensions or annuities
  • Social Security
  • Unemployment benefits
  • Alimony
  • Child support

The 2023 EITC Table

Investment income limit: $11,000 or less

The-2023-EITC-Table

Be sure to consult with your tax professional to analyze your specific tax situation. At Taxperts, we can assess your small business structure and suggest ways to increase your savings. Check out our website, Facebook page, or LinkedIn page to learn more.

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