# Earned income credit: what it is, how much it pays and who gets it

Source: https://taxbracketsdesk.com/earned-income-credit
Publisher: Tax Brackets Desk (taxbracketsdesk.com), independent editorial site
Topic: Earned Income Credit
Last updated: 2026-09-18

> The earned income credit (EITC) is a refundable federal credit for people who work and earn low to moderate pay. For tax year 2026, filed in 2027, it is worth up to $664 with no qualifying children and up to $8,231 with three or more. It disappears at incomes between $19,540 and $70,244, depending on children and filing status.

## Key facts

- Maximum credit, tax year 2026: $664 (no children) to $8,231 (three or more children)
- Highest income that still qualifies: Under $70,244, married filing jointly with three or more children
- Investment income limit: $12,200 for 2026
- Refundable: Yes, fully refundable
- Form: Form 1040 line for EIC, plus Schedule EIC if you claim a child
- Tax year 2027 amounts: Not yet announced (usually released in October or November)

## What the earned income credit is

The earned income credit is a federal tax credit that rewards paid work at lower income levels. The IRS also calls it the earned income tax credit, and tax forms label it EIC. All three names mean the same credit, set out in section 32 of the Internal Revenue Code.

The credit is **fully refundable**. If it is larger than the income tax you owe, the IRS pays you the difference. A worker who owes no income tax at all can still receive the whole credit as part of the refund, which is why many people file a return only to collect it.

The amount is not a flat figure. It grows with each dollar you earn up to a set point, holds steady for a stretch, then shrinks as income rises until it reaches zero. Where you land on that curve depends on your earned income, your adjusted gross income (AGI), your filing status and how many qualifying children you claim.

## How much is the EITC for 2026?

For tax year 2026, the returns filed in early 2027, the maximum EITC ranges from $664 to $8,231. The IRS set these figures in Rev. Proc. 2025-32, released October 9, 2025. Every figure rose slightly from 2025 because the credit is indexed to inflation.

The third column matters as much as the second. You reach the maximum only once your earned income hits that level. A parent of two who earned $10,000 gets 40% of $10,000, or $4,000, not the $7,316 ceiling. Our [earned income credit 2026](https://taxbracketsdesk.com/earned-income-credit/earned-income-credit-2026) page compares each amount with 2025 and runs examples at several pay levels.

> **2027 figures:** The EITC amounts for tax year 2027 are not yet announced. The IRS usually publishes them in October or November; the 2026 figures came out on October 9, 2025.

## Earned income tax credit income limits

The credit ends at a completed phaseout amount. Your AGI and your earned income must both be below that figure. Married couples filing jointly get a higher limit than everyone else.

| Qualifying children | Single, head of household, qualifying surviving spouse | Married filing jointly |
| --- | --- | --- |
| None | $19,540 | $26,820 |
| One | $51,593 | $58,863 |
| Two | $58,629 | $65,899 |
| Three or more | $62,974 | $70,244 |

Income at which the 2026 EITC reaches zero

The credit starts shrinking well before those limits. With children, the reduction begins at $23,890 of income for most filers and $31,160 for joint filers. Without children it begins at $10,860 and $18,140. The full phaseout grid, with the 2025 figures beside it, is in our [EITC income limits table](https://taxbracketsdesk.com/earned-income-credit/eitc-income-limits-table).

A separate cap applies to investment income such as interest, dividends, capital gains and net rental income. If that total is more than **$12,200** for 2026, you get no EITC at all, even if your pay is low.

## Who qualifies for the earned income credit

Everyone who claims the credit must meet a short list of basic rules. People with a qualifying child then meet the child tests; people without one meet an age and residence test instead.

### Rules for every filer

- You have earned income from a job, self-employment or certain disability pay received before minimum retirement age.
- You, your spouse on a joint return and any child you claim have a Social Security number valid for work, issued by the return due date.
- You are a US citizen or resident alien for the whole year.
- You do not file Form 2555 to exclude foreign earned income.
- Your filing status is single, head of household, qualifying surviving spouse or married filing jointly. Married filing separately works only in limited separated-spouse cases.
- Your investment income is $12,200 or less.

### With a qualifying child

The child must pass four tests: relationship, age, residency and joint return. The age test is under 19 at year end, under 24 if a full-time student for at least five months, or any age if permanently and totally disabled. The child must also live with you in the United States for more than half the year. Our [EITC qualifications checklist](https://taxbracketsdesk.com/earned-income-credit/eitc-qualifications-checklist) goes through each test and the tie-breaker rules.

### Without a qualifying child

You must be at least 25 and under 65 at the end of the year, live in the United States for more than half the year, and not be someone else's dependent or qualifying child. The [earned income credit with no children](https://taxbracketsdesk.com/earned-income-credit/earned-income-credit-no-children) page covers this smaller credit in detail.

## How the EIC is figured and paid

The credit has three stages. In the phase-in, you earn a fixed percentage of each dollar of earned income: 7.65% with no children, 34% with one, 40% with two and 45% with three or more. On the plateau, you receive the maximum. In the phaseout, the credit drops by 7.65%, 15.98% or 21.06% of every dollar of income above the threshold.

In the phaseout, the IRS uses the larger of your AGI or your earned income. So unemployment benefits, interest or a taxable retirement withdrawal can cut the credit even though they are not earned income. Our [earned income credit calculator](https://taxbracketsdesk.com/earned-income-credit/earned-income-credit-calculator) applies these rates step by step.

### Claiming it on your return

1. File Form 1040 or 1040-SR, even if your income is below the normal filing requirement.
2. Enter the credit on the earned income credit line of the form, using the EIC table in the Form 1040 instructions or tax software.
3. Attach Schedule EIC if you claim one or more qualifying children. It lists each child's name, SSN, birth year, relationship and months lived with you.
4. If the IRS denied or reduced a past EITC for a reason other than a math or clerical error, attach Form 8862 to recertify.

By law the IRS holds refunds that include the EITC until mid-February, so an early January filer should expect to wait. You can also claim a missed credit for an earlier year: the IRS gives you three years from the original due date to file for the refund.

## When your credit is smaller than expected

A raise, a second job, a new spouse's income or a child who aged out can each move the credit a lot. With one child, every extra $1,000 of income in the phaseout costs $159.80 of credit; with two or more it costs $210.60. Our guide on [why your EITC is low](https://taxbracketsdesk.com/earned-income-credit/why-is-my-eitc-low) walks through each cause with numbers.

The EITC works alongside the child tax credit, not in place of it. A family can claim both for the same child if each credit's rules are met. See the [child tax credit guide](https://taxbracketsdesk.com/child-tax-credit) for how that credit's $2,200 per child and $1,700 refundable portion fit on the same return.

## Common questions

### Is the earned income credit the same as the EITC?

Yes. Earned income credit, earned income tax credit, EITC and EIC are all names for the same federal credit under section 32 of the tax code. The IRS website usually says EITC, while Form 1040 and Schedule EIC use EIC.

### Is the EITC refundable?

Yes, the whole credit is refundable. After it wipes out any income tax you owe, the rest is paid to you in your refund. You still have to file a return to get it.

### What is the most you can get from the earned income credit?

For tax year 2026 the ceiling is $8,231, which requires three or more qualifying children and earned income of at least $18,290 while total income stays under the phaseout threshold. Smaller families have lower ceilings.

### Can I get the earned income credit if I only have unemployment income?

No. Unemployment benefits are not earned income for the EITC. You need wages, tips, net self-employment earnings or another type of earned income, and the unemployment pay still counts in your AGI.

### Do I need to file taxes to get the EITC if I made very little?

Yes. The IRS pays the credit only through a filed Form 1040 or 1040-SR, even when your income is too low to require a return. Free IRS-certified volunteer help and IRS Free File are available.

### Can I claim the earned income credit for past years?

Yes, generally within three years of the return's original due date. If you already filed and missed it, you amend that year with Form 1040-X.

## Sources

- [Rev. Proc. 2025-32 (tax year 2026 inflation adjustments), section 4.06](https://www.irs.gov/pub/irs-drop/rp-25-32.pdf)
- [IRS: Earned Income Tax Credit (EITC)](https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit-eitc)
- [IRS: Who qualifies for the EITC](https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/who-qualifies-for-the-earned-income-tax-credit-eitc)
- [IRS: How to claim the EITC](https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/how-to-claim-the-earned-income-tax-credit-eitc)
- [26 U.S. Code section 32 (credit and phaseout percentages)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section32&num=0&edition=prelim)