Do you qualify for the Earned Income Tax Credit?

The Earned Income Tax Credit (EITC) can reduce how much you owe or boost your refund by thousands of dollars — depending on your filing status and if your adjusted gross income (AGI) doesn't exceed certain limits.

CNBC Select explains how the EITC works, how much it can save you and who qualifies for it in 2024.

The EITC is a tax break available to eligible low- and middle-income workers. The amount you can claim depends on how much income you earn and how many qualifying children you have in your household, though you can still qualify if you don't have any children at all.

For the income earned in 2023, you can claim up to $7,430, depending on your filing status and qualifying children. Here's the breakdown based on the information from the IRS:

• If you don't have any children, you can claim up to $600. Your AGI can't exceed $17,640 if you're single or head of household, or $24,210 if you're married filing jointly.
• If you have one child, you can claim up to $3,995. In this case, the AGI limit for single or head-of-household filers is $46,560 and $53,120 for those married filing jointly.
• If you have two children, the maximum EITC is $6,604. The maximum AGI for single filers or heads of household is $52,838. If you're married and filing jointly, that amount goes up to $59,478.
• Finally, those with three or more children can claim up to $7,430. In this case, your AGI can't be more than $56,838 (single or head of household) or $63,398 (married filing jointly).

Additionally, there's an investment income cap of $11,000 that applies to all of the situations above. If you earn more investment income than that, you won't qualify for the EITC even if your other income falls below the limits.

Besides the income limits, you need to meet a few additional qualifications to successfully claim the EITC, including:

• You're a U.S. citizen or resident alien and have a valid Social Security number.
• If you're married and filing separately, you and your spouse must either be legally separated and not living together at the end of the tax year or have lived apart during the last six months of the year.
• You haven't earned any income this tax year in a foreign country.
• Nobody is claiming you as a qualifying child on their tax return.
• If you're claiming the EITC without a child, you're at least 25 but under 65 years old. When filing with a spouse, at least one of you must meet the age requirement.

If you are claiming the credit for a child, they also need to meet certain rules to qualify.

• They must be related to you. That includes biological or adopted children, stepchildren, foster children or grandchildren. Your siblings, half-siblings and stepsiblings (or their children) can qualify too.
• They must be under 19 years old at the end of the year, and also younger than you and your spouse if you're filing jointly. However, if your child is a full-time student, the age limit is 24.
• If the child is "permanently and totally disabled" according to the IRS, there is no age limit to qualify.
• They must have lived with you or your spouse in the U.S. for more than half the year.

Members of the military and the clergy have special EITC rules, as well as people with disability income and children with disabilities. If you want to ensure you and your family qualify, you can use the EITC Assistant to check your eligibility and estimate the amount of your credit.

To claim the EITC, you need to file your annual tax return (Form 1040 or Form 1040-SR). If you're also claiming this tax break for a qualifying child, you'll have to file the Schedule EIC to provide the IRS with some additional information.

If you're using tax software, you can possibly claim the EITC for free. For example, TurboTax includes it in its free edition (according to TurboTax, roughly 37% of taxpayers are eligible to file for free).

Similarly, you can qualify for Free Online Tax Filing with H&R Block and claim your EITC. For a simple tax return, it can be a great solution as the software makes the filing process simple and intuitive.

Further, you can find alternative ways to file your taxes for free and claim the EITC, including IRS Free File.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every tax guide is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of tax software products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

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