TECHNICAL GLOSSARY

What Does Earned Income Credit Mean?

The EIC (sometimes called the EITC) is a type of refundable federal tax credit provided to support working individuals/families in earning income and having expenses (help pay for rent, groceries) in order to support themselves, generally for workers,families with low-to-middle income. The goal of the EIC is two-fold: First, it creates incentives for individuals/families to become working members of society either (or both) by lowering their tax obligations; Second, it helps to reduce poverty through increased refunds that those who qualify will receive.
Because the EIC is refundable, individuals/families who qualify will receive money back even if they do not owe any federal income tax

Who Is Eligible for the Earned Income Credit?

In order to qualify for the EIC (Earned Income Credit), you need to meet some general eligibility criteria:

• You must have earned income from working (this includes wages or salary as well as self-employment income)
• Your yearly income must not be above certain annual income limits based upon your filing status and number of qualifying children
• To receive an EIC, you must file a federal tax return
• To claim your EIC, you must have a valid Social Security number
• To determine how much EIC you can qualify for, your filing status, income level and number of qualifying children will help to calculate the credit amount

The IRS will update the eligibility and income limit rules every year.

Earned Income Credit Income Limits (2023)

Income limits vary based on filing status and **number of qualifying children