Publication 596: Earned Income Credit EIC

Publication 596, also known as the EITC guide, explains the Earned Income Credit, a tax credit reducing tax owed or increasing your tax refund if you meet specific income and filing status requirements.

What is the EITC?

The Earned Income Credit (EITC), also known as the EIC and covered in Publication 596 by the IRS, is a refundable tax credit for low- and moderate-income workers. It reduces the amount of taxes owed or increases your tax refund.

Who may qualify for the EIC?

A. Must have earned income: Wages, salaries, and tips from a job count as earned income.

B. Meet filing status and income limits: These vary depending on your filing status and the number of qualifying children you have. Refer to Publication 596 or the IRS EITC Assistant tool for specific details.

C. Have a valid Social Security number (SSN): You and your spouse (if filing jointly) must have valid SSNs.

D. Meet residency and citizenship requirements: You must be a U.S. citizen, resident alien, or a nonresident alien filing a joint return with a U.S. citizen spouse.

Benefits of claiming the EIC:

Reduces your tax owed: The EITC can lower the amount of taxes you owe or increase your tax refund.

Helps with household expenses: The EITC can help cover basic needs like food, clothing, and housing.

Incentivizes work: The EITC rewards work and can encourage people to enter or stay in the workforce.