The Earned Income Tax Credit (EITC): How It Works and Who Receives It
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The Earned Income Tax Credit (EITC): How It
November 14, 2023
Works and Who Receives It
Margot L. Crandall-Hollick
The Earned Income Tax Credit (EITC) is a refundable tax credit that boosts the income
Specialist in Public Finance
Works and Who Receives It
Updated September 14, 2026
(R43805)
Jump to Main Text of Report
of eligible low-income workers, especially those with children. Because the credit is
refundable, an EITC recipient need not owe income taxes to receive the benefit. refundable, an EITC recipient need not owe income taxes to receive the benefit.
Gene Falk
Eligibility for and the amount of the EITC are based on a variety of factors, including Eligibility for and the amount of the EITC are based on a variety of factors, including
Specialist in Social Policy
the amount of earned income and other sources of income, the presence and number of the amount of earned income and other sources of income, the presence and number of
qualifying children, age requirements for those without qualifying children, and qualifying children, age requirements for those without qualifying children, and
Conor F. Boyle
residency and taxpayer ID requirements. Taxpayers with residency and taxpayer ID requirements. Taxpayers with incomeincomes above certain above certain
Analyst in Social Policy
thresholds are ineligible for the credit. These income thresholds vary based on marital thresholds are ineligible for the credit. These income thresholds vary based on marital
status and number of qualifying children.status and number of qualifying children.
The EITC depends on a recipientThe EITC depends on a recipient’'s earned income. Specifically, the EITC phases in as a s earned income. Specifically, the EITC phases in as a
percentage of earned income (the percentage of earned income (the“"credit ratecredit rate”") until the credit amount reaches its maximum level. The EITC then ) until the credit amount reaches its maximum level. The EITC then
remains at its maximum level over a subsequent range of earned incomeremains at its maximum level over a subsequent range of earned income, between the between the “"earned income amountearned income amount”
and the “phaseout amount threshold.”" and the "threshold phaseout amount." Finally, the credit gradually decreases to zero at a fixed rate (the Finally, the credit gradually decreases to zero at a fixed rate (the “"phaseout phaseout
rate”rate") for each additional dollar of adjusted gross income (AGI) (or earned income, whichever is greater) above ) for each additional dollar of adjusted gross income (AGI) (or earned income, whichever is greater) above
the the threshold phaseout amountphaseout amount threshold. The specific values of these EITC parameters (e.g., credit rate, earned income . The specific values of these EITC parameters (e.g., credit rate, earned income
amount) vary depending on several factors, including the number of qualifying children a taxpayer has and the amount) vary depending on several factors, including the number of qualifying children a taxpayer has and the
taxpayer’taxpayer's marital status, as illustrated in the figure and table below. For s marital status, as illustrated in the figure and table below. For 20232026, the maximum EITC amounts are , the maximum EITC amounts are
(1) $(1) $600664 for a taxpayer without children in for a taxpayer without children in theirthe household; (2) $ household; (2) $3,9954,427 for a taxpayer with one child; (3) $ for a taxpayer with one child; (3) $6,604
7,316 for a taxpayer with two children; and (4) $for a taxpayer with two children; and (4) $7,4308,231 for a taxpayer with three or more children. for a taxpayer with three or more children.
EITC Amount by Number of Qualifying Children, Marital Status, and Income,2023
20262022-38 and Internal Revenue Code §32.
Congressional Research Service
The Earned Income Tax Credit (EITC): How It Works and Who Receives It
EITC Parameters by Marital Status and Number of Qualifying Children, 2023
Number of Qualifying Children
0
1
2
3 or more
2025-32 and Section 32 of the Internal Revenue Code.
unmarried taxpayers (single and head of household filers)(single and head of household filers)
credit rate
7.65%
34%
40%
45%
earned income amount
$7,840
$11,750
$16,510
$16,510
maximum credit amount
$600
$3,995
$6,604
$7,430
phaseout amount threshold
$9,800
$21,560
$21,560
$21,560
phaseout rate
7.65%
15.98%
21.06%
21.06%
income where credit = 0
$17,640
$46,560
$52,918
$56,838
married taxpayers (married filing jointly)
credit rate
7.65%
34%
40%
45%
earned income amount
$7,840
$11,750
$16,510
$16,510
maximum credit amount
$600
$3,995
$6,604
$7,430
phaseout amount threshold
$16,370
$28,120
$28,120
$28,120
phaseout rate
7.65%
15.98%
21.06%
21.06%
income where credit = 0
$24,210
$53,120
$59,478
$63,398
Source: IRS Revenue Procedure 2022-38 and Internal Revenue Code §32.
The EITC is provided to individuals and families once a year,
The EITC is provided to individuals and families once a year in a lump-sum payment after individuals and families file their in a lump-sum payment after individuals and families file their
federal income tax returns. Like all tax credits, the EITC can reduce income tax liability. And because the EITC is a federal income tax returns. Like all tax credits, the EITC can reduce income tax liability. And because the EITC is a
refundable tax credit, if refundable tax credit, ifa taxpayer’s EITC istaxpayers' EITCs are greater than what they owe in income taxes, they can receive the difference (the greater than what they owe in income taxes, they can receive the difference (the
portion of the credit that remains after offsetting any income tax liability) as portion of the credit that remains after offsetting any income tax liability) asa tax refund (or an increasetax refunds (or increases in their tax in their tax refund,refunds if if
they are already receiving they are already receivinga refundrefunds). The amount of the credit ). The amount of the credit whichthat exceeds exceeds their income tax liability is sometimes referred income tax liability is sometimes referred
to as the to as the refundable portion of the credit. of the credit.
The amount of the credit a taxpayer receives The amount of the credit a taxpayer receives in a given tax filing year is based on the prior yearis based on the prior year’'s earned income and family composition. In other s earned income and family composition. In other
words, the words, the20232025 EITC is based on EITC is based on 20232025 earned income (and other earned income (and other 20232025 factors) factors), but will not be paid until tax returns are filed but will not be paid until tax returns are filed
in 2024.
in 2026.
The EITC is not counted as income in determining eligibility for or the amount of any federally funded public benefit The EITC is not counted as income in determining eligibility for or the amount of any federally funded public benefit
programprograms. An EITC refund that is saved by a taxpayer does not count against the resource limits of any federally funded . An EITC refund that is saved by a taxpayer does not count against the resource limits of any federally funded
public benefit program for 12 months after the refund is received.public benefit program for 12 months after the refund is received.
According to the most recent IRS data, for According to the most recent IRS data, for 20202023 (i.e., (i.e., 20202023 income tax returns filed in income tax returns filed in 2021), 26.02024), 24.4 million taxpayers ( million taxpayers (1615% of % of
all taxpayers filing all taxpayers filingan individual income tax individual income tax returnreturns) received a total of $) received a total of $5965.3 billion from the EITC, making the credit the billion from the EITC, making the credit the
largest largestneedneeds-tested antipoverty program that provides cash benefits. In that year, 96% of all EITC dollars were received by -tested antipoverty program that provides cash benefits. In that year, 96% of all EITC dollars were received by
families with children. There was considerable variation in EITC receipt by state, with a families with children. There was considerable variation in EITC receipt by state, with agreaterdisproportionate share filed in certain share filed in certain
southern states compared to other regions of the country.southern states compared to other regions of the country.
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Contents
Introduction ..................................................................................................................................... 1
Eligibility for the EITC ................................................................................................................... 1
Filing a Federal Income Tax Return .......................................................................................... 2
Earned Income .......................................................................................................................... 2
Residency Requirements ........................................................................................................... 3
Qualifying Children .................................................................................................................. 3
Age Requirements for EITC Recipients with No Qualifying Children .................................... 4
Investment Income .................................................................................................................... 4
Disallowance of the EITC Due to Fraud or Reckless Disregard of Rules ................................ 4
Identification Requirements ...................................................................................................... 5
Calculating the EITC ....................................................................................................................... 5
EITC Eligibility by Poverty Status............................................................................................ 8
EITC Eligibility by Earned Income at the Federal Minimum Wage ....................................... 10
Payment of the EITC ..................................................................................................................... 12
Interaction with Other Tax Provisions ..................................................................................... 13
Treatment of the EITC for Need-Tested Benefit Programs ..................................................... 15
Data on EITC Receipt ................................................................................................................... 15
Trends in EITC Receipt from 1975 to 2020 ............................................................................ 15
EITC Receipt for 2020 ............................................................................................................ 19
By Number of Qualifying Children .................................................................................. 19
By Income Level ............................................................................................................... 21
By Marital Status .............................................................................................................. 23
By Region ......................................................................................................................... 24
Figures
Figure 1. Maximum EITC by Number of Qualifying Children, 2023 ............................................. 6
Figure 2. EITC for an Unmarried Taxpayer with One Child by Income, 2023 ............................... 7
Figure 3. EITC Parameters as a Percentage of Poverty by Marital Status and Number of
Qualifying Children, 2023 ............................................................................................................ 9
Figure 4. EITC Parameters as a Percentage of Full-Time Employment at the Federal
Minimum Wage by Marital Status and Number of Qualifying Children, 2023 .......................... 11
Figure 5. Number of Tax Returns with the EITC, 1975-2020 ....................................................... 17
Figure 6. Total EITC Dollars, 1975-2020 ...................................................................................... 18
Figure 7. Average EITC, 1975-2020 ............................................................................................. 19
Figure 8. Distribution of Total EITC Dollars by Number of Qualifying Children, 2020 .............. 20
Figure 9. Number of Tax Returns with the EITC by Number of Qualifying Children, 2020 ........ 21
Figure 10. Average EITC by Number of Qualifying Children, 2020 ............................................ 21
Figure 11. Number of Tax Returns with the EITC and Average EITC per Return by
Adjusted Gross Income (AGI), 2020 ......................................................................................... 23
Figure 12. Distribution of Total EITC Dollars by Marital Status and Number of
Qualifying Children, 2017 .......................................................................................................... 24
Figure 13. Percentage of Tax Returns with the EITC by State, 2020 ............................................ 25
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Tables
Table 1. EITC Parameters by Marital Status and Number of Qualifying Children, 2023 .............. 5
Table A-1. EITC Receipt, 1975-2020 ............................................................................................ 26
Table A-2. Average EITC, Number of Tax Returns with the EITC, and Total EITC by
Qualifying Children and Adjusted Gross Income, 2020 ............................................................ 28
Table A-3. EITC Receipt by State, 2020 ....................................................................................... 30
Table A-4. EITC Participation Rates by State, 2009-2019 ............................................................ 32
Appendixes
Appendix. Additional Tables ......................................................................................................... 26
Contacts
Author Information ........................................................................................................................ 35
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link to page 10 The Earned Income Tax Credit (EITC): How It Works and Who Receives It
Introduction
relatively low earnings. Because the credit is refundable, an EITC recipient need not owe taxes to relatively low earnings. Because the credit is refundable, an EITC recipient need not owe taxes to
receive the benefit. The credit is authorized by Section 32 of the Internal Revenue Code (IRCreceive the benefit. The credit is authorized by Section 32 of the Internal Revenue Code (IRC
§32) and administered as part of the federal income tax system. According to ) and administered as part of the federal income tax system. According to IRS data, 26Internal Revenue Service (IRS) data, 24 million million
taxpayers received a total of $taxpayers received a total of $5966 billion from the EITC for billion from the EITC for 20202023, making the credit the largest , making the credit the largest
needneeds-tested antipoverty program that provides cash benefits.-tested antipoverty program that provides cash benefits.
Under current law, the EITC is calculated based on a recipientUnder current law, the EITC is calculated based on a recipient’'s earned income, using one of s earned income, using one of
eight different formulas, which vary depending on several factors, including the number of eight different formulas, which vary depending on several factors, including the number of
qualifying children a taxpayer has (zero, one, two, or three or more) and qualifying children a taxpayer has (zero, one, two, or three or more) andtheir marital status marital status
(unmarried or married). All else being equal, the amount of the credit tends to increase with the (unmarried or married). All else being equal, the amount of the credit tends to increase with the
number of eligible children the EITC recipient has. Indeed, most of the EITCnumber of eligible children the EITC recipient has. Indeed, most of the EITC’'s benefits—96% of s benefits—96% of
EITC dollars for EITC dollars for20202023—went to families with children.—went to families with children.
This report provides an overview of the EITC, first discussing eligibility requirements for the This report provides an overview of the EITC, first discussing eligibility requirements for the
credit, followed by how the credit is computed and paid. The report then provides data on the credit, followed by how the credit is computed and paid. The report then provides data on the
growth of the EITC since it was first enacted in 1975. growth of the EITC since it was first enacted in 1975.Finally, the reportIt concludes with the most concludes with the most
recent IRS data on the EITC from recent IRS data on the EITC from20202023 income tax returns, examining EITC receipt by number income tax returns, examining EITC receipt by number
of qualifying children, income level, tax filing status, and location of residence.of qualifying children, income level, tax filing status, and location of residence.
Eligibility for the EITC
A taxpayer must fulfill the following requirements to claim the EITC:A taxpayer must fulfill the following requirements to claim the EITC:
1. 1. The taxpayer must file a federal income tax return.The taxpayer must file a federal income tax return.
2.
2. The taxpayer must have earned income.The taxpayer must have earned income.
3.
3. The taxpayer must meet certain residency requirements.The taxpayer must meet certain residency requirements.
4.
4. The taxpayerThe taxpayer’'s children must meet relationship, residency, and age requirements s children must meet relationship, residency, and age requirements
to be considered qualifying children for the credit.to be considered qualifying children for the credit.
5.
5. Childless workers who claim the credit must be between ages 25 and 64.Childless workers who claim the credit must be between ages 25 and 64.1 (This
age For childless married couples, at least one spouse must fall within this age range.1 (This requirement requirement does not apply to EITC claimants to EITC claimants with qualifying children.)
6. .)
6. The taxpayerThe taxpayer’'s investment income must be below a certain amount.s investment income must be below a certain amount.
7.
7. The taxpayer must not be disallowed the credit due to prior fraud or reckless The taxpayer must not be disallowed the credit due to prior fraud or reckless
disregard of the rules when disregard of the rules when they previously claimed the EITC.
8. The taxpayer must provide the Social Security number (SSNpreviously attempting to claim the EITC.
8. Taxpayers must provide Social Security Numbers (SSNs) for themselves, their spouses) for themselves,
their spouse, if married, and any children for whom the credit is claimed., and any children for whom the credit is claimed.2
2Additionally, a taxpayer with income above a certain dollar amount (labeled as Additionally, a taxpayer with income above a certain dollar amount (labeled as “"income where income where
credit = 0credit = 0” in" in Table 1) will will not be eligiblebe ineligible for the credit. Given that this income level is dependent
1 A taxpayer without qualifying children who can be claimed as a dependent on another person’s tax return is ineligible
for the EITC. In addition, claimants without qualifying children must live in the United States for more than half the
year.
2 The SSN must be issued to a citizen of the United States or pursuant to a provision of the Social Security Act relating
to the lawful admission for employment in the United States. See IRC §§32(m).
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link to page 10 The Earned Income Tax Credit (EITC): How It Works and Who Receives It
for the credit. Given that this income level is dependent on the number of qualifying children and marital status of the taxpayer, on the number of qualifying children and marital status of the taxpayer, this requirement is
the calculation of this threshold amount is discussed in greater detail in the section discussed in greater detail in the sectionof the report entitled “titled "Calculating the EITC.”
."
Requirements (1) through (8) are discussed in detail below.Requirements (1) through (8) are discussed in detail below.
Filing a Federal Income Tax Return
A person must file a federal income tax return to be eligible for the EITC. A person must file a federal income tax return to be eligible for the EITC.Those who do not file a
federal income tax return cannot receive the EITC.
The EITC can be claimed by The EITC can be claimed by taxpayers filing their tax return as married filing jointly, head of
household, or single.3 In certain cases, taxpayers can claim the EITC if they use the filing status
of married filing separately.4married couples filing joint tax returns and by unmarried individuals filing as single, as heads of household, or as qualifying surviving spouses.3 Married separate filers may claim the EITC only in certain specific circumstances.4 If the taxpayer has a qualifying child, the taxpayer must include the If the taxpayer has a qualifying child, the taxpayer must include the
child’child's name and s name and Social Security numberSSN on a separate schedule (Schedule EIC) filed with the on a separate schedule (Schedule EIC) filed with the
federal tax return.federal tax return.55
Earned Income
A taxpayer must have earned income to claim the EITC. Earned income for the EITC is defined A taxpayer must have earned income to claim the EITC. Earned income for the EITC is defined
as wages, tips, and other compensation included in gross income. It also includes net self-as wages, tips, and other compensation included in gross income. It also includes net self-
employment income (self-employment income after employment income (self-employment income afterdeduction of one-halfdeducting 50% of Social Security of Social Security
payroll taxes paid by a self-employed individual). In addition, according to the payroll taxes paid by a self-employed individual). In addition, according to theInternal Revenue
ServiceIRS, those who provide care for disabled individuals and receive certain nontaxable payments , those who provide care for disabled individuals and receive certain nontaxable payments
under a Medicaid waiver may treat those payments as earned income for under a Medicaid waiver may treat those payments as earned income forthe purposes of the purposes of the
EITC.EITC.6
6
In addition, servicemembers may elect to include combat pay in their earned income when In addition, servicemembers may elect to include combat pay in their earned income when
calculating the EITC. All income earned by a member of the Armed Forces while in a designated calculating the EITC. All income earned by a member of the Armed Forces while in a designated
combat zone is considered combat pay and is normally combat zone is considered combat pay and is normally not included in taxable income. However, in taxable income. However,
a taxpayer may elect to include combat pay as earned income for the purpose of calculating the
3 There is an additional filing status that may claim the EITC—“qualifying widow(er) with dependent child.”
Generally, taxpayers may file their tax return as married filing jointly in the year their spouse died. A taxpayer may be
eligible to use qualifying widow(er) with dependent child as his or her filing status for two years following the year his
or her spouse died. This filing status entitles the taxpayer to use joint return tax rates and the highest standard deduction
amount (if he or she does not itemize deductions). It does not entitle the taxpayer to file a joint return. The taxpayer
calculates the EITC using the formula for other unmarried tax filing statuses (head of household and single). The
eligibility rules for this filing status can be found on page 10 of IRS Publication 501, available at http://www.irs.gov/
pub/irs-pdf/p501.pdf.
4 As a result of a permanent change to the law made by the American Rescue Plan Act (ARPA; P.L. 117-2), an
individual who is married and files their tax return separately from their spouse can claim the EITC if the individual
lives with a child for whom they can claim the EITC for more than half the year and either: (1) does not have the same
principal place of abode as their spouse for the last six months of the year; or (2) has a decree, instrument, or agreement
and does not live with their spouse at the end of the year.
5 The most recent version of this form can be found at https://www.irs.gov/forms-pubs/about-schedule-eic-form-1040.
6 These payments are provided to individual care providers for the care of eligible individuals under a state Medicaid
Home and Community-Based Services waiver program described in §1915(c) of the Social Security Act and are not
subject to federal taxation. See IRS Notice 2014-7; IRS, Certain Medicaid Waiver Payments May Be Excludable From
Income, February 23, 2015, https://www.irs.gov/individuals/certain-medicaid-waiver-payments-may-be-excludable-
from-income; and Feigh v. Commissioner, No. 20163-17, 152 T.C. 267, May 15, 2019.
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The Earned Income Tax Credit (EITC): How It Works and Who Receives It
EITC.7a taxpayer may elect to include combat pay as earned income when calculating the EITC.7 Generally, servicemembers will make this election if it results in a larger credit. (Using Generally, servicemembers will make this election if it results in a larger credit. (Using
combat pay to calculate the EITC does not make the combat pay taxable income.)combat pay to calculate the EITC does not make the combat pay taxable income.)
Certain forms of income are not considered earned income for the Certain forms of income are not considered earned income for the purpose of the EITC. These EITC. These
include pension and annuity income, income of include pension and annuity income, income of a nonresident nonresidentaliensalien not from a U.S. business, not from a U.S. business,
income earned income earnedwhile incarcerated for work in a prisonfor work in a prison, and TANF while incarcerated, and Temporary Assistance for Needy Families (TANF) benefits paid in exchange for benefits paid in exchange for
participation in work experience or community service activities.participation in work experience or community service activities.
Finally, taxpayers who claim the foreign earned income exclusion (i.e., they file Form 2555 or Finally, taxpayers who claim the foreign earned income exclusion (i.e., they file Form 2555 or
Form 2555EZ with their federal income tax returnForm 2555EZ) are ineligible ) are ineligible to claimfor the EITC. the EITC.88
Residency Requirements
Under current law, an EITC recipient must be a resident of the United States, unless the recipient Under current law, an EITC recipient must be a resident of the United States, unless the recipient
resides in another country because of U.S. military serviceresides in another country because of U.S. military service.9
.9 Qualifying Children
An EITC recipientAn EITC recipient’'s qualifying child must meet three requirements.s qualifying child must meet three requirements.1010 First, the child must have a First, the child must have a
specific specificrelationshiprelationship to the taxpayer ( to the taxpayer (being a son, daughter, son, daughter, step childstepchild or foster child, or foster child,1111 brother, sister, brother, sister,
half-brother, half-sister, half-brother, half-sister,step brother, step sisterstepbrother, stepsister, or descendent of such a relative). Second, the , or descendent of such a relative). Second, the
child must share a child must share a residence with the taxpayer for more than half the year in the United States. with the taxpayer for more than half the year in the United States.12
12 Third, the child must meet certain Third, the child must meet certain age requirements;; namely, the child must be under the age of namely, the child must be under the age of
19 (or 19 (or under age 24 by the end of the tax yearage 24, if a full-time student) or be permanently and totally disabled., if a full-time student) or be permanently and totally disabled.
As a result of these three requirements, a child may be the qualifying child of more than one As a result of these three requirements, a child may be the qualifying child of more than one
taxpayer in the same household. For example, a child who lives with a single parent, grandparent, taxpayer in the same household. For example, a child who lives with a single parent, grandparent,
and aunt in the same home could be a qualifying child and aunt in the same home could be a qualifying childoffor all three of these individuals. But only all three of these individuals. But only
one of these individuals can claim the qualifying child for the EITC, and the others cannot. In one of these individuals can claim the qualifying child for the EITC, and the others cannot. In
these cases, “tiebreaker” rules for who can claim the child for the EITC apply.13 If, as a result of
7 For more information, see https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/special-eitc-
rules.
8 See Internal Revenue Code (IRC) §32(c)(1)(C) and http://www.irs.gov/Individuals/EITC,-Earned-Income-Tax-
Credit,-Questions-and-Answers.
9 ARPA (P.L. 117-2) permanently provided the U.S. Treasury with the authority to make payments to Puerto Rico,
American Samoa, and mirror-code territories for amounts those territories pay out in their own territorial EITCs. For
Puerto Rico and American Samoa, such payments are contingent upon those territories increasing the amount of their
EITC or enacting an EITC, respectively. The law also provided Puerto Rico with matching funds, up to $600 million
per year, to provide a larger credit to its residents.
10 If an individual is the qualifying child for the purposes of the EITC of another person, that individual cannot
themselves claim the EITC. For more information, see http://www.irs.gov/Individuals/EITC,-Earned-Income-Tax-
Credit,-Questions-and-Answers.
11 If placed by an authorized agency or court order.
12 Qualifying children who reside with a servicemember who is stationed outside the United States while serving on
extended active duty with the U.S. Armed Forces are considered to reside in the United States for the purposes of the
EITC.
13 See IRC §152(c)(4). Under tiebreaker rules, a child who can be claimed as an EITC qualifying child of more than
one taxpayer is generally treated as the EITC qualifying child of (by order of application): (1) the parents, if they file a
joint return and claim the child as a qualifying child; (2) the parent if only one of the persons is the child’s parent and
the parent claims the child as a qualifying child; (3) the parent with whom the child lived for the longer period of time
(continued...)
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The Earned Income Tax Credit (EITC): How It Works and Who Receives It
these rules, a taxpayer cannot claim any qualifying children for the EITC, the taxpayer may be
able to claim the credit for those with no qualifying children.14
these cases, "tiebreaker" rules are used to determine who can claim the child.13 Age Requirements for EITC Recipients with No Qualifying
Children
Children If a taxpayer has If a taxpayer has no qualifying children, he or she must be between 25 and 64 years of age to , he or she must be between 25 and 64 years of age tobe
eligible forclaim the EITC. There is no age requirement for taxpayers the EITC. There is no age requirement for taxpayers with qualifying children..
Investment Income
A taxpayer with investment income over a certain dollar amount is ineligible for the EITC. For A taxpayer with investment income over a certain dollar amount is ineligible for the EITC. For
2023, the limit on investment income is $11,000.152026, the limit is $12,200.14 Investment income is defined as interest Investment income is defined as interest
income (including tax-exempt interest), dividends, net rent, net capital gains, and net passive income (including tax-exempt interest), dividends, net rent, net capital gains, and net passive
income. It also includes royalties that are from sources other than the filerincome. It also includes royalties that are from sources other than the filer’'s ordinary business s ordinary business
activities.activities.
Disallowance of the EITC Due to Fraud or Reckless Disregard
of Rules
A taxpayer is barred from claiming the EITC for a period of 10 years after the IRS makes a final A taxpayer is barred from claiming the EITC for a period of 10 years after the IRS makes a final
determination to reduce or disallow a taxpayerdetermination to reduce or disallow a taxpayer’'s EITC because that individual made a fraudulent s EITC because that individual made a fraudulent
EITC claim. A taxpayer is barred from claiming the EITC for a period of two years after the IRS EITC claim. A taxpayer is barred from claiming the EITC for a period of two years after the IRS
determines that the individual made an EITC claim determines that the individual made an EITC claim“"due to reckless and intentional disregard of due to reckless and intentional disregard of
the rulesthe rules”" of the EITC of the EITC, but but thatsuch disregard was not found to be fraud.15
Identification Requirements
To be eligible for the credit, taxpayers must provide work-authorized SSNs for themselves, their spouses, and any qualifying children.16 The SSNs must be issued before the due date of the income tax return.17 Noncitizens with work-authorized SSNs are eligible for the credit. disregard was not found to be fraud.16
during the tax year if two of the persons are the child’s parent, they do not file a joint return together, and both parents
claim the child; (4) the parent with the highest AGI if the child lived with each parent for the same amount of time
during the tax year, they do not file a joint return together, and both parents claim the child; (5) the person with the
highest AGI if no parent can claim the child as a qualifying child; or (6) the person with the highest AGI if a parent
may claim the child as a qualifying child but no parent claims the child as a qualifying child, but only if that person has
an AGI higher than any parent who may claim the child as a qualifying child. For examples of application of the
tiebreaker rules and answers to common questions, see Internal Revenue Service, Qualifying Child of More Than One
Person, AGI and Tiebreaker Rules, June 23, 2017, https://www.eitc.irs.gov/tax-preparer-toolkit/frequently-asked-
questions/qualifying-child-of-more-than-one-person-agi-and.
14 Currently, there is no federal regulation which states that taxpayers with a qualifying child who do not claim that
qualifying child for the EITC are ineligible for the credit. In the past, information provided on the IRS website stated
that such individuals were ineligible for the childless EITC. However, “the IRS has changed its position in proposed
regulations.” For more information, see Joint Committee on Taxation, Present Law and Background of Individual
Refundable Income Tax Credits and a Description of Modifications to Refundable Credits Included in H.R. 6800, as
Passed by the House of Representatives, June 16, 2020, JCX-17-20, pp. 9-10.
15 In 2020 and 2021, this threshold was $3,650. This amount was permanently increased by ARPA (P.L. 117-2) to
$10,000 in 2021 and annually adjusted for inflation thereafter.
16 See IRC §32(k).
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Identification Requirements
To be eligible for the credit, the taxpayer must provide Social Security numbers (SSNs) for work
purposes for themselves, spouses if married filing jointly, and any qualifying children.17 The
SSNs must be issued before the due date of the income tax return.18 (U.S. citizenship is not
required to be eligible for the credit. SSNs do not indicate U.S. citizenship.) Nonresident aliens— Nonresident aliens—
those who do not have green cards or do not spend sufficient time in the United States—are those who do not have green cards or do not spend sufficient time in the United States—are
generally ineligible for the EITC.generally ineligible for the EITC.19
18 Calculating the EITC
The EITC amount is based on formulas that consider earned income, number of qualifying The EITC amount is based on formulas that consider earned income, number of qualifying
children, marital status, and adjusted gross income (AGI). In general, the EITC equals a fixed children, marital status, and adjusted gross income (AGI). In general, the EITC equals a fixed
percentage (the percentage (the“"credit ratecredit rate”") of earned income until the credit reaches its maximum amount. The ) of earned income until the credit reaches its maximum amount. The
EITC then remains at its maximum level over a subsequent range of earned income, between the EITC then remains at its maximum level over a subsequent range of earned income, between the
“"earned income amountearned income amount” and the “phaseout amount threshold.”" and the "phaseout threshold amount." Finally, the credit gradually Finally, the credit gradually
decreases decreasesin value to zero at a fixed rate (the at a fixed rate (the “"phaseout ratephaseout rate”") for each additional dollar of earned ) for each additional dollar of earned
income or AGI (whichever is greater) above the income or AGI (whichever is greater) above the threshold phaseout amountphaseout amount threshold. The specific .19 The values values
of these EITC parameters (of these EITC parameters (e.g., credit rate, earned income amount, etc.) vary depending on credit rate, earned income amount, etc.) vary depending on
several factors, including the number of qualifying children a taxpayer has and several factors, including the number of qualifying children a taxpayer has andtheir marital marital
status, as illustrated status, as illustratedinin Table 1.
Table 1. EITC Parameters by Marital Status
and Number of Qualifying Children, 2023
2026 Number of Qualifying Children
0
1
2
3 or more
unmarried taxpayers (single (single andfilers, head of household filers head of household filers)
credit rate
7.65%
34%
40%
45%
earned income amount
$7,840
$11,750
$16,510
$16,510
maximum credit amount
$600
$3,995
$6,604
$7,430
phaseout amount threshold
$9,800
$21,560
$21,560
$21,560
phaseout rate
7.65%
15.98%
21.06%
21.06%
income where credit = 0
$17,640
$46,560
$52,918
$56,838
married taxpayers (married filing jointly)
credit rate
7.65%
34%
40%
45%
earned income amount
$7,840
$11,750
$16,510
$16,510
17 For more information on Social Security numbers valid for work purposes, see SSA, Social Security Number for
Noncitizens, at https://www.socialsecurity.gov/pubs/EN-05-10096.pdf; CRS Report R43840, Federal Income Taxes
and Noncitizens: Frequently Asked Questions, by Erika K. Lunder and Margot L. Crandall-Hollick; archived CRS
Report R44290, Legal Authority for Aliens to Claim Refundable Tax Credits: In Brief, by Erika K. Lunder.
18 See IRC §32(m).
19 Nonresident aliens may be eligible to claim the credit if they are married to a U.S. citizen or resident alien, make the
election to be treated as a resident alien, and file a joint return. For more information on the tax treatment of
nonresident aliens, see CRS Report RS21732, Federal Taxation of Aliens Working in the United States, by Erika K.
Lunder (available to congressional clients upon request); CRS Report R43840, Federal Income Taxes and Noncitizens:
Frequently Asked Questions, by Erika K. Lunder and Margot L. Crandall-Hollick.
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Number of Qualifying Children
0
1
2
3 or more
maximum credit amount
$600
$3,995
$6,604
$7,430
phaseout amount threshold
$16,370
$28,120
$28,120
$28,120
phaseout rate
7.65%
15.98%
21.06%
21.06%
income where credit = 0
$24,210
$53,120
$59,478
$63,398
Source: IRS Revenue Procedure 2022-38 and Internal Revenue Code §32.
The EITC ranges from a maximum credit of $600 for a taxpayer without a qualifying child to
$7,430 for a taxpayer with three or more qualifying children, as illustrated in Figure 1.
Figure 1. Maximum EITC by Number of Qualifying Children, 2023
Source: Congressional Research Service, based on IRS Revenue Procedure 2022-38 and Internal Revenue Code
(IRC) §32.
The phaseout amount threshold , and qualifying surviving spouses)
The maximum EITC ranges from $664 for taxpayers without qualifying children to $8,231 for taxpayers with three or more qualifying children, as illustrated in Figure 1.
The threshold phaseout amount varies by varies by both the number of qualifying children a taxpayer has the number of qualifying children a taxpayer has
and theirand his or her marital status. The phaseout marital status. The phaseout amount threshold for those who are married filing joint
returns is $6,560threshold amount for married joint filers is $7,270 greater than for unmarried taxpayers with the same number of children greater than for unmarried taxpayers with the same number of children in 2026. For . For
those without qualifying children, the difference in the phaseout those without qualifying children, the difference in the phaseoutamount thresholdthreshold amount among married among married
versus unmarried taxpayers is $versus unmarried taxpayers is $6,5707,280. (Except in certain cases, . (Except in certain cases, taxpayers who file as married
filing separatelymarried separate filers are ineligible for the EITC.) This higher are ineligible for the EITC.) This higher threshold phaseout amount phaseout amount threshold for married for married
taxpayers reduces (but taxpayers reduces (butgenerally does not eliminate) does not eliminate) potential “"marriage penaltiesmarriage penalties”" in the EITC in the EITC
whereby the credit for a married couple is less than the combined whereby the credit for a married couple is less than the combinedcreditcredits of two unmarried of two unmarried
recipients.
individuals. Figure 2 shows 2026 EITC amounts2 illustrates the EITC amount by earned income level for an unmarried taxpayer with one by earned income level for an unmarried taxpayer with one
child for 2023. It shows the three distinct ranges of EITCchild. The figure illustrates three distinct income ranges for this family: for this family:
• Phase-in Rangerange: The EITC increases with earned income from the first dollar of The EITC increases with earned income from the first dollar of
earned income up to earned income of $earned income up to earned income of $11,75013,020. Over this earned income range, . Over this earned income range,
the credit equals the the credit equals the credit rate (34% for a taxpayer with one child) times the (34% for a taxpayer with one child) times the
amount of annual earned income. The $amount of annual earned income. The $11,75013,020 threshold is called the threshold is called the earned
income amount and is the level at which the EITC ceases to increase with earned and is the level at which the EITC ceases to increase with earned
income. The income interval up to the earned income amount, where the EITC income. The income interval up to the earned income amount, where the EITC
increases with earned income, is known as the increases with earned income, is known as the phase-in range..
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•
Plateau: The EITC remains at its maximum level of $ The EITC remains at its maximum level of $3,9954,427 from the earned from the earned
income amount ($income amount ($11,750) until $21,560. The $3,995 credit13,020) until $23,890 of AGI or earned income. The $4,427 amount represents the represents the
maximum credit for a taxpayer with one childfor a taxpayer with one child in 2023. The income interval . The income interval with
the EITC fixed at itsfor the maximum maximum EITC value represents the value represents the plateau onin Figure 2.
•
Phaseout Range: Once adjusted gross incomerange: Once AGI (or if greater, earned income) (or if greater, earned income)
exceeds $exceeds $21,56023,890, the EITC is reduced , the EITC is reduced by 15.98 cents for every additional dollar over that for every additional dollar over that
amount. The $amount. The $21,56023,890 threshold is known as the threshold is known as the phaseout amount threshold amount for a for a
single taxpayer with one child in single taxpayer with one child in2023. For each dollar over the phaseout amount
threshold, the EITC is reduced by 15.98%2026. The 15.98% rate is known as the . The 15.98% rate is known as the
phaseout rate. The income interval from the phaseout . The income interval from the phaseoutincome levelthreshold amount until the until the
EITC is completely phased outEITC falls to $0 is known as the is known as the phaseout range..
The EITC is completely phased out The EITC is completely phased out (EITC = $0) once the taxpayeronce the taxpayer’'s AGI (or earned income, s AGI (or earned income,
whichever is greater) reaches $whichever is greater) reaches $46,56051,593. The earned income amounts and the . The earned income amounts and the phaseout amount
thresholdsthreshold phaseout amounts are adjusted each year for inflation are adjusted each year for inflation, effectively adjusting. Because the maximum credit the maximum credit amount
annually for inflation.
amounts and the income levels at which the EITC falls to $0 are calculated in reference to the earned income amounts and the threshold phaseout amounts, those values rise in line with inflation every year as well. by Income, 2023
2026 Source: Congressional Research Service, based on information in IRS Revenue Procedure Congressional Research Service, based on information in IRS Revenue Procedure2022-38 and2025-32 and Section 32 of the Internal Internal
Revenue CodeRevenue Code §32.
. Notes: In this simplified example, adjusted gross income (AGI) is assumed to equal earned income. In this simplified example, adjusted gross income (AGI) is assumed to equal earned income.
EITC claimants use tables published by the IRS to calculate their credit EITC claimants use tables published by the IRS to calculate their credit amountamounts based on their based on their
income, marital status, and number of qualifying children. The instructions for the federal income income, marital status, and number of qualifying children. The instructions for the federal income
tax form show tax form showthe EITC amounts in tables EITC amounts in tables bywith income brackets (in $50 increments). income brackets (in $50 increments).20
EITC Eligibility by Poverty Status
20
20 The tables can be found, for 2022 returns beginning on page 46 of the Form 1040 general instructions, at
https://www.irs.gov/pub/irs-pdf/i1040gi.pdf.
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EITC Eligibility by Poverty Status
While the EITC is available to many families who are in poverty, it is also available for many While the EITC is available to many families who are in poverty, it is also available for many
families whose families whoseincome placesincomes place them above the federal poverty guidelines. them above the federal poverty guidelines. As previously
discussed, the EITC declines in value above a certain dollar threshold,The income level at which the credit reaches $0 is sometimes referred to as the referred to as the phaseout
amounteligibility threshold threshold.
As illustrated by the two rows labeled "income where credit = 0" in Table 1, there are eight eligibility thresholds . That threshold, combined with the phaseout rate, results in a specific income
level above which a taxpayer is ineligible for the credit (referred to as “income where credit = 0”
in Table 1). This income level, where the credit reaches zero, is sometimes referred to as the
eligibility threshold.
As illustrated in Table 1, there are eight eligibility thresholds for the EITC that depend on a
taxpayer’that depend on a taxpayer's number of qualifying children and marital status. The eligibility thresholds vary every s number of qualifying children and marital status. The eligibility thresholds vary every
year given that they are based in part on a parameter of the credit—the phaseout amount
threshold—that is adjusted year because they are based on two credit parameters—the maximum credit and the phaseout threshold amount—that are adjusted annually for inflation. for inflation.
Figure 3 illustrates the illustrates the20232026 EITC parameters EITC parameters inin Table 1 as a percentageas percentages of the of the 20232026 federal federal
poverty guidelines. poverty guidelines.An EITC claimant’s income must be below these thresholds for the claimant
toHouseholds below the guidelines generally qualify for the EITC. For example, the poverty guideline for a family of three in qualify for the EITC. For example, the poverty guideline for a family of three in 20232026 was $27,320 was
$24,860. Families of three with income at or below this amount are considered poor. The EITC . Families of three with income at or below this amount are considered poor. The EITC
eligibility threshold of $eligibility threshold of $52,91858,629 for an unmarried person filing with two qualifying children was for an unmarried person filing with two qualifying children was
more than twice (more than twice (213215%) the poverty guideline for a family of that size.%) the poverty guideline for a family of that size.
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Number of Qualifying Children, 2023
2026 Source: Congressional Research Service, based on IRS Revenue Procedure Congressional Research Service, based on IRS Revenue Procedure2022-38, Internal Revenue Code
(IRC) §32 and the 20232025-32, Section 32 of the Internal Revenue Code, and the 2026 Poverty Guidelines available at https://aspe.hhs.gov/poverty-guidelines Poverty Guidelines available at https://aspe.hhs.gov/poverty-guidelines.
. Notes: Poverty levels are based on the federal poverty guidelines for the lower 48 states. Poverty levels are based on the federal poverty guidelines for the lower 48 states.
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EITC Eligibility by Earned Income at the Federal Minimum Wage
Figure 4 expresses expressesthesethe same eligibility thresholds same eligibility thresholds from the previous figure as a percentage of the earned income of a as a percentage of the earned income of a
worker who worker whoworks atis paid the federal minimum wage ($7.25 per hour) the federal minimum wage ($7.25 per hour), while working 40 hours per week, 52 weeks a 40 hours per week, 52 weeks a
year ($15,080 annually). For year ($15,080 annually). Forthe purposes of the calculations purposes of the calculations inin Figure 4, married EITC married EITC
recipients are assumed to have recipients are assumed to have twice the aggregate annual earned income as unmarried the aggregate annual earned income as unmarried
recipients—$30,160. In other words, both spouses are assumed to work full timerecipients—$30,160. In other words, both spouses are assumed to work full time and year-round. The 2026.
The EITC is available EITC is available in 2023 to familiesto filers with children who have earned income with children who have earned income from $0 to between 1.between 1.7695 to 4.18 to
3.77 times the annual earnings from a minimum wage job ( times the annual earnings from a minimum wage job (176195% to % to 377418% of $15,080 per % of $15,080 per
worker). In contrast, worker). In contrast,if aa childless married couple with married couple with no children has income that is more than 80% of the
annual earnings of a household with two full-time workers making the federal minimum wagetwo full-time workers making the federal minimum wage,
they would be ineligible for the EITC. Of note, the majority of states (30) have minimum wages would be ineligible for the EITC. Of note, the majority of states (30) have minimum wages
that are higher than the federal minimum wage.that are higher than the federal minimum wage. About 421 In 2023, about four out of 10 returns out of 10 returns whichthat included the included the
EITC EITCarewere filed by residents of the 20 states with a minimum wage of $7.25 an hour.22
filed by residents of the 20 states with a minimum wage of $7.25 an hour.21
21 According to data from the U.S. Labor Department, the 15 states that have state minimum wages that equal the
federal minimum wage of $7.25 an hour are Georgia, Iowa, Idaho, Indiana, Kansas, Kentucky, North Carolina, North
Dakota, New Hampshire, Oklahoma, Pennsylvania, Texas, Utah, Wisconsin, and Wyoming. Five states have no
minimum wage: Alabama, Louisiana, Mississippi, South Carolina, and Tennessee. In these states, employers subject to
the Fair Labor Standards Act must pay the current federal minimum wage of $7.25 per hour. For more information, see
U.S. Department of Labor, State Minimum Wage laws, January 1, 2023, https://www.dol.gov/agencies/whd/minimum-
wage/state. Based on data from the Internal Revenue Service for the 2020 tax year, there were a total of 110.4 million
returns with the EITC filed by residents in these 20 states with $25.2 billion in total EITC claims (about 43% of all
EITC dollars for 2020).
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Figure 4. EITC Parameters as a Percentage of Full-Time Employment at the Federal
Figure 4. EITC Parameters as a Percentage of Full-Time Employment at the Federal Minimum Wage by Marital Status and Number of Qualifying Children, 2023
2026 Source: Congressional Research Service, based on IRS Revenue Procedure Congressional Research Service, based on IRS Revenue Procedure2022-38, Internal Revenue Code
(IRC) §32 and the earned income per work2025-32, Section 32 of the Internal Revenue Code, and the earned income of one earned income of one worker who worksor two workers employed at the federal minimum at the federal minimum
wage ($7.25 per hour), 40 hours per week, 52 weeks a year ($15,080 annuallywage ($7.25 per hour), 40 hours per week, 52 weeks a year ($15,080 annually).
per worker). Notes: For Forthe purposes of the calculations, the total household income of married EITC recipients ($30,160) is purposes of the calculations, the total household income of married EITC recipients ($30,160) is
assumed to be double the income of unmarried recipients ($15,080).assumed to be double the income of unmarried recipients ($15,080).
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The Earned Income Tax Credit (EITC): How It Works and Who Receives It
Payment of the EITC
The EITC is provided to individuals and families annually in a lump-sum payment after a The EITC is provided to individuals and families annually in a lump-sum payment after a
taxpayer files a federal income tax return.taxpayer files a federal income tax return.2223 Like all tax credits, the EITC can reduce income tax Like all tax credits, the EITC can reduce income tax
liability. And because the EITC is a refundable tax credit, if liability. And because the EITC is a refundable tax credit, ifa taxpayer’s EITC istaxpayers' EITCs are greater than greater than
what they owe in income taxes, they can receive the difference (the portion of the credit that what they owe in income taxes, they can receive the difference (the portion of the credit that
remains after offsetting any income tax liability) as a tax refund (or an increase in their tax remains after offsetting any income tax liability) as a tax refund (or an increase in their tax
refund,refunds if they are already receiving if they are already receiving a refund).
refunds).
The amount of the credit that remains after offsetting any income tax liability is often referred to The amount of the credit that remains after offsetting any income tax liability is often referred to
as the as the refundable portion of the EITC, whereas the amount that reduces income tax liability is of the EITC, whereas the amount that reduces income tax liability is
referred to as the referred to as the nonrefundable portion of the credit. The refundable portion . The refundable portion of the credit can can
also offset other tax liabilities collected on the federal income tax return. These other taxes also offset other tax liabilities collected on the federal income tax return. These other taxes
include self-employment taxes and uncollected Social Security and Medicare taxes (e.g., Social include self-employment taxes and uncollected Social Security and Medicare taxes (e.g., Social
Security and Medicare taxes on unreported tip income).Security and Medicare taxes on unreported tip income).2324 Generally, only refundable credits, Generally, only refundable credits, like
such as the EITC, can offset other non-incomethe EITC, can offset other non-income -tax liabilities. The amount of the refundable portion that tax liabilities. The amount of the refundable portion that
remains after offsetting other tax liabilities is sometimes referred to as the remains after offsetting other tax liabilities is sometimes referred to as the“refunded”"refunded" amount. A amount. A
taxpayer who has no income tax liability will taxpayer who has no income tax liability willreceive all of the EITC as the refundable portion of
the credit.
have the entire EITC refunded.
Of the total aggregate amount of the EITC received for Of the total aggregate amount of the EITC received for 2020—$59.2 billion:
• $0.72023, $65.3 billion, the following amounts went to refunds and tax offsets:$0.9 billion offset income tax liabilities;
$9.4 billion offset income tax liability remaining after nonrefundable credits;
• $6.8 billion offset other taxes collected on billion offset other taxes collected on the income tax income tax return; and
• $51.7 billion exceeded income tax liability.
In other words, for 2020, $58.6 billion of the EITC ($6.8 billion plus $51.7returns; and
$55.9 billion exceeded income and other tax liabilities and were received as refunds.25 In other words, for 2023, $65.3 billion of the EITC ($9.4 billion plus $55.9 billion) was received billion) was received
as the refundable portion of the credit (and hence exceeded income taxes owed after reducing as the refundable portion of the credit (and hence exceeded income taxes owed after reducing
income tax income taxliabilityliabilities by any nonrefundable tax credits).26 In total, the refundable portion represented 98.6% of all EITC benefits in 2023.
The EITC benefits families when they file their income taxes. Thus, payments are generally based on the prior year's income, earned income, and family composition.27 That is, the 2026 EITC, based on a taxpayer's earned income and family composition in 2026, will be paid in 2027.28 If the taxpayer is owed a refund, and that filer' by any nonrefundable tax credits).24
The EITC benefits families when they file their income taxes. Thus, payments are generally based
on the prior year’s income, earned income, and family composition.25 That is, the 2023 EITC,
22 Before 2011, any persons with a qualified child eligible for the EITC could elect to receive advance payment of the
credit through the employer’s payroll withholding system by filing an eligibility certificate (Form W-5) with his or her
employer. The option was little used and eliminated by P.L. 111-226.
23 Other taxes include uncollected Social Security and Medicare taxes due on compensation of an employee that was
treated as an independent contractor by an employer. There are a variety of other taxes collected on the federal income
tax return. Generally, these taxes are more likely to be paid by higher-income taxpayers who would not receive the
EITC. They include additional penalty taxes on individual retirement accounts (IRAs) and other qualified retirement
accounts or other tax-favored accounts, household employment taxes, repayment of the first-time homebuyer credit,
and the 0.9% additional Medicare tax on higher-income taxpayers. Of note, the net investment income tax (NIIT) is
considered an income tax.
24 This sum does not equal the total due to rounding.
25 Congress has sometimes allowed certain taxpayers to elect to use older earned income in computing their EITC (and
the refundable portion of the child tax credit, known as the additional child tax credit or ACTC). In other words, if the
most recent earned income results in a smaller credit than the previous year’s earned income, taxpayers may use that
older earned income to calculate the EITC and ACTC. For a discussion, see “EITC/CTC Credit Computation Look-
Back” in CRS Report R45864, Tax Policy and Disaster Recovery, by Brendan McDermott and Jennifer Teefy. Most
recently, P.L. 116-260 included a provision allowing taxpayers to use 2019 earned income (as opposed to 2020 earned
income) in calculating their 2020 EITC and ACTC.
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The Earned Income Tax Credit (EITC): How It Works and Who Receives It
based on a taxpayer’s earned income and family composition in 2023, will be paid in 2024.26 If
the taxpayer is owed a refund, and that filer’s return includes an EITC, that refund will be made s return includes an EITC, that refund will be made
on or after February 15on or after February 15.27
of the filing year.29 Interaction with Other Tax Provisions
On the On the federal income tax form, the EITC can be found in the payments section after the lines for (1) income tax tax form, the EITC can be found in the payments section after the lines for (1) income tax
liability net of any nonrefundable credits, (2) other non-income tax paymentsliability net of any nonrefundable credits, (2) other non-income tax payments, and (3) the lines for and (3) the lines for
withholding and estimated tax payments. Nonrefundable tax credits, which withholding and estimated tax payments. Nonrefundable tax credits, whichare taken against
(reduce)reduce income tax liability, include the Lifetime Learning credit, income tax liability, include the Lifetime Learning credit,2830 the child and dependent care the child and dependent care
credit,credit,2931 a savings credit, a savings credit,3032 and the nonrefundable portions of both the child and the nonrefundable portions of both the child credit31credit33 and the and the
American Opportunity tax credit (AOTC).American Opportunity tax credit (AOTC).3234 If an EITC-eligible family has any income tax If an EITC-eligible family has any income tax
liability and receives one or more of these credits, the liability and receives one or more of these credits, the total amount of oftheirthe EITC will remain EITC will remain
unchanged, but the amount unchanged, but the amountthey receive as the refundable portion of the creditthe family receives as a refund (i.e., the amount (i.e., the amount
which exceeds income tax liability) will change. Specifically, if nonrefundable tax credits can
reduce a family’s tax liability, a greater amount of their EITC will be received as the refundable
portion, and less will offset their income tax liability.
26 The Protecting Americans from Tax Hikes (PATH) Act (Division Q of P.L. 114-113) prevents a taxpayer from
claiming the EITC for any year in which the filer did not have a Social Security number (SSN) on or before the due
date of the tax return for that year. This provision prevents a filer who obtains an SSN from retroactively claiming the
EITC for any prior open tax years (generally three years) when the filer did not have an SSN at the time those years’
returns were due.
27 This was effective beginning with returns filed in 2017 (i.e., 2016 income tax returns). §201 of the Protecting
Americans from Tax Hikes (PATH) Act (Division Q of P.L. 114-113).
28 CRS Report R41967, Higher Education Tax Benefits: Brief Overview and Budgetary Effects, by Margot L. Crandall-
Hollick.
29 See CRS Report R44993, Child and Dependent Care Tax Benefits: How They Work and Who Receives Them, by
Margot L. Crandall-Hollick.
30 See CRS In Focus IF11159, The Retirement Savings Contribution Credit, by Molly F. Sherlock..
31 For more information on the nonrefundable (and refundable) portion of the child tax credit, see CRS Report R41873,
The Child Tax Credit: How It Works and Who Receives It, by Margot L. Crandall-Hollick.
32 See CRS Report R42561, The American Opportunity Tax Credit: Overview, Analysis, and Policy Options, by Margot
L. Crandall-Hollick.
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which exceeds income tax liability) will increase. EITC Participation Rates
According to the IRS, According to the IRS, 7981% of eligible EITC recipients received the credit for % of eligible EITC recipients received the credit for 20192022 (i.e., on their (i.e., on their 20192022 income tax income tax
returnreturns), with substantial variation by number of qualifying children.), with substantial variation by number of qualifying children.3335 Older data from the IRS Taxpayer Advocate Older data from the IRS Taxpayer Advocate
indicate that taxpayers with no qualifying children have lower participation rates than those with children. indicate that taxpayers with no qualifying children have lower participation rates than those with children.
According to these data, for 2016According to these data, for 2016, an estimated 65% of eligible EITC recipients with no qualifying children claimed an estimated 65% of eligible EITC recipients with no qualifying children claimed
the theEITCcredit, compared to , compared to an estimated 86% participation for those86% of eligible recipients with one child, 85% with one child, 85% participation for those with with
two children, and 82% two children, and 82%participation for those with three children.with three children.3436 Participation rate estimates by state can be Participation rate estimates by state can be
found infound in
Table A-4. Although the EITC's nonparticipation rate is 21% (the inverse of the 79% participation rate), the unpaid benefits rate is lower, because credit nonparticipants are eligible for smaller average EITCs than credit participants are. Estimates suggest that roughly 11% to 15% of potential EITC benefits are never claimed.37
Eligible individuals may not claim the EITC for a variety of reasons. The IRS notes that nonparticipants include workers who are "grandparents raising their grandchildren; Native Americans; veterans; self-employed; without a qualifying child;4.
Eligible individuals may not claim the EITC for a variety of reasons. The IRS notes that nonparticipants are more
likely to be workers who are “living in rural areas, self-employed, receiving certain disability pensions or have
children with disabilities, without a qualifying child, not proficient in English, grandparents raising their
grandchildren, or recently divorced, unemployed, or experienced other changes to their marital, financial or recently divorced, unemployed, or experienced other changes to their marital, financial or
parental status.”35 In addition, eligible workers who do not (and are not required to) file a federal income tax
return due to their low incomes, wil not receive the credit.
Data on EITC receipt summarized parental status; below the filing requirement with earnings; not proficient in English; living in rural areas; [or] receiving certain disability pensions or have children with disabilities."38
Data on EITC receipt in this report are from the IRS Statistics of Incomein this report are from the IRS Statistics of Income (SOI), which generally , which generally
provides information on credit receipt (after compliance measures like auditsprovides information on credit receipt (after compliance measures like audits in a given year). Hence, EITC receipt ). Hence, EITC receipt
data include data includeeligible and ineligible recipientseveryone who receives the EITC—even if they were incorrectly given credits—but do not include eligible individuals or families who choose to forgo the credit. For more information, see CRS Report R43873, . For more information, see CRS Report R43873, The Earned Income
Tax Credit (EITC): Administrative and Compliance Challenges, by Margot L. Crandall-Hol ick.
.
For taxpayers whose income places them in the For taxpayers whose income places them in the “"phaseout rangephaseout range”" of the credit, reducing their of the credit, reducing their
income (all else being unchanged) will result in income (all else being unchanged) will result ina larger EITC. (As illustrated in Figure 2,
reducing income when a taxpayer is in the phaseout range results in the taxpayer increasing the
amount of the credit they receive.)larger EITCs. A variety of forms of income can be excluded from both AGI A variety of forms of income can be excluded from both AGI
and earned income, reducing a taxpayerand earned income, reducing a taxpayer’'s AGI s AGI orand earned income for purposes of calculating the earned income for purposes of calculating the
credit. For example, pretax contributions to savings accounts for retirement or medical expenses credit. For example, pretax contributions to savings accounts for retirement or medical expenses
are not included in either AGI or earned income. Hence, by making these contributions, EITC are not included in either AGI or earned income. Hence, by making these contributions, EITC
claimants whose claimants whoseprecontribution income placespre-contribution incomes place them in the credit them in the credit’'s phaseout range s phaseout range willmay reduce reduce
their AGI or earned income for purposes of calculating the EITCtheir AGI or earned income for purposes of calculating the EITC, and thus receive and thus receivea
larger credit.36
Inlarger credits.39
By contrast, for taxpayers whose earned contrast, for taxpayers whose earned income placesincomes place them in the credit them in the credit’s “'s "phase-in rangephase-in range”,
," reducing their earned reducing their earnedincomeincomes (all else unchanged) (all else unchanged) will result in a results in smaller smaller EITCEITCs. (As previously . (As previously
noted, the credit phases in over a range of earned income, whereas it phases out based on noted, the credit phases in over a range of earned income, whereas it phases out based onadjusted
gross incomeAGI or earned income, whichever is greater.) or earned income, whichever is greater.) As illustrated in Figure 2, reducing income
when a taxpayer is in the phase-in range results in the taxpayer reducing the amount of the credit
they receive. Generally, income that is not subject to taxation (i.e., it is excluded by law) cannot Generally, income that is not subject to taxation (i.e., it is excluded by law) cannot
be included in earned income for purposes of calculating the EITC. However, as previously be included in earned income for purposes of calculating the EITC. However, as previously
discussed, servicemembers may elect to include their nontaxable combat pay as earned incomediscussed, servicemembers may elect to include their nontaxable combat pay as earned income,
for purposes of for calculating the EITC. Generally, servicemembers whose calculating the EITC. Generally, servicemembers whose income (excluding their
combat pay) placesnon-combat pay incomes place them in the phase-in range will elect to include their combat pay in earned income to receive larger credits.
Treatment of EITC Income for Needs-Tested Benefit Programs
By law, EITC refunds cannot be counted as income when determining eligibility for, or amounts of, them in the phase-in range will elect to include their combat pay in earned
income for purposes of calculating the EITC in order to receive a larger credit.
33 Center for Administrative Records Research and Applications, U.S. Census Bureau in collaboration with IRS. Data
can be found at https://www.eitc.irs.gov/eitc-central/participation-rate/eitc-participation-rate-by-states.
34 National Taxpayer Advocate, Earned Income Tax Credit, Special Report to Congress, Volume 3. Figure A.7.
35 Internal Revenue Service, “About EITC: Who are we missing?” June 29, 2020, https://www.eitc.irs.gov/eitc-central/
about-eitc/about-eitc.
36 In contrast, if the precontribution income places them in the plateau or the phase-in range, decreasing their earned
income by making certain pretax savings contributions may either have no impact or result in a smaller credit.
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Treatment of the EITC for Need-Tested Benefit Programs
By law, the EITC cannot be counted as income in determining eligibility for, or the amount of,
any federally funded public benefit program, including Supplemental Nutrition Assistance any federally funded public benefit program, including Supplemental Nutrition Assistance
Program Program(SNAP) food assistance, low-income housing, Medicaid, Supplemental Security Incomefood assistance, low-income housing, Medicaid, Supplemental Security Income
(SSI), and Temporary Assistance for Needy Families (TANF).37, and TANF.40 An EITC that is saved by the filer An EITC that is saved by the filer
does not count against the resource limits of any federally funded public benefit program for 12 does not count against the resource limits of any federally funded public benefit program for 12
months after the refund is received.months after the refund is received.
Data on EITC Receipt
The EITC was first enacted in 1975 as a temporary measure meant to encourage economic The EITC was first enacted in 1975 as a temporary measure meant to encourage economic
growth in the face of the 1974 recession and rising food and energy prices. It was also originally growth in the face of the 1974 recession and rising food and energy prices. It was also originally
intended to intended to“"assist in encouraging people to obtain employment, reducing the unemployment rate, assist in encouraging people to obtain employment, reducing the unemployment rate,
and reducing the welfare rolls.and reducing the welfare rolls.”38"41 Over time Over time, the list of EITC objectives has grown to include the list of EITC objectives has grown to include
poverty reduction. Today the EITC is the largest poverty reduction. Today the EITC is the largestneedneeds-tested, antipoverty -tested, antipoverty program that provides
cash benefitscash benefit program. This section first provides a historical overview of the growth of the EITC from . This section first provides a historical overview of the growth of the EITC from
1975 to 1975 to2020; it2023, the most recent year for which comprehensive data are available. It then examines information on EITC receipt for then examines information on EITC receipt for 2020.
2023. Trends in EITC Receipt from 1975 to2020
2023 When originally enacted by the Tax Reduction Act of 1975 (P.L. 94-12), the EITC was a When originally enacted by the Tax Reduction Act of 1975 (P.L. 94-12), the EITC was a
temporary refundable tax credit in effect for 1975. For that year, 6.2 million taxpayers received temporary refundable tax credit in effect for 1975. For that year, 6.2 million taxpayers received
$1.25 billion from the EITC (or $$1.25 billion from the EITC (or $6.0 billion in constant 2020 dollars, which adjusts for inflation).
7.1 billion in 2023 dollars).42 The credit was extended several more times on a temporary basis and made permanent by the The credit was extended several more times on a temporary basis and made permanent by the
Revenue Act of 1978 (P.L. 95-600). Legislation enacted in 1986 (P.L. 99-514), 1990 (P.L. 101-Revenue Act of 1978 (P.L. 95-600). Legislation enacted in 1986 (P.L. 99-514), 1990 (P.L. 101-
508), 1993 (P.L. 103-66), 2001 (P.L. 107-16), and 2009 (P.L. 111-5) increased the amount of the 508), 1993 (P.L. 103-66), 2001 (P.L. 107-16), and 2009 (P.L. 111-5) increased the amount of the
credit by changing the credit formula. For more information on the legislative history of the credit by changing the credit formula. For more information on the legislative history of the
EITC, see CRS Report R44825, EITC, see CRS Report R44825, The Earned Income Tax Credit (EITC): Legislative History, by
Margot L. Crandall-Hollick
.
Before 1990, the credit amount was calculated as a percentage of earned income (Before 1990, the credit amount was calculated as a percentage of earned income (“"the credit the credit
rate”) up untilrate") up through the earned income amount. The credit then remained at its maximum level before the earned income amount. The credit then remained at its maximum level before
gradually decreasing in value as earned income increased. Legislative changes to the credit made gradually decreasing in value as earned income increased. Legislative changes to the credit made
during this time generally increased the amount of the credit in a variety of ways, including during this time generally increased the amount of the credit in a variety of ways, including
by increasing the credit rate, increasing the earned income amount, increasing the phaseout amount increasing the credit rate, increasing the earned income amount, increasing the phaseout amount
threshold, and decreasing the phaseout rate.threshold, and decreasing the phaseout rate.
Beginning in 1990 and more substantially in 1993, the credit formula was revised such that the Beginning in 1990 and more substantially in 1993, the credit formula was revised such that the
credit amount varied based on earned income andcredit amount varied based on earned income and, to a certain extent, the number of qualifying the number of qualifying
children. This revision essentially children. This revision essentiallyincreasedmade the credit the credit by family sizemore substantial for larger families. In addition, in 1993, . In addition, in 1993,
Congress made workers Congress made workers without qualifying children eligible for the EITC for the first time, qualifying children eligible for the EITC for the first time,
althoughthough the credit the credit for such workers was smaller than was smaller than the credit for claimantsfor those with qualifying children.
In 2001, the credit formula was revised again so that it also varied based with qualifying children.
37 The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (P.L. 111-312) included a
provision which made tax refunds, including those resulting from the EITC, disregarded in the administration of federal
programs and federally assisted programs. At the end of 2012, this provision was made permanent by the American
Taxpayer Relief Act of 2012 (P.L. 112-240). See IRC §6409.
38 U.S. Congress, Senate Committee on Finance, Tax Reduction Act of 1975, Report to Accompany H.R. 2166, 94th
Cong., 1st sess., March 17, 1975, S.Rept. 94-36, p. 33.
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In 2001, the credit formula was revised again so that it also varied based in part on marital status. on marital status.
As a result of this change, often referred to as As a result of this change, often referred to as“"marriage penalty relief,marriage penalty relief,”" certain married taxpayers certain married taxpayers
would receive a larger credit than began receiving larger credits than did unmarried taxpayers with the same number of children. In unmarried taxpayers with the same number of children. In
2009, the marriage penalty relief was expanded further2009, the marriage penalty relief was expanded further, and a larger credit was created for families and a larger credit was created for families
with three or more children. These 2009 changes were with three or more children. These 2009 changes were temporarily extended several times and extended several times and later made made
permanent by P.L. 114-113permanent by P.L. 114-113.39
.43 How Did the American Rescue Plan Act (ARPA; P.L. 117-2) Change the EITC in
2021?
In response to the economic fallout from the COVID-19 pandemic, Congress passed several laws that included In response to the economic fallout from the COVID-19 pandemic, Congress passed several laws that included
temporary provisions designed to provide financial relief to individuals and families, including the American Rescue temporary provisions designed to provide financial relief to individuals and families, including the American Rescue
Plan Act (ARPA; P.L. 117-2). For 2021, ARPA Plan Act (ARPA; P.L. 117-2). For 2021, ARPAtemporarilytemporarily expanded the EITC for taxpayers with no expanded the EITC for taxpayers with no credit
qualifying children—sometimes called the “childless EITC.” It expanded the childless EITCqualifying children. It did so by adjusting the by adjusting the credit benefit formula formula
and expanding the age range for eligible workers.and expanding the age range for eligible workers.4044 These changes nearly tripled the maximum credit amount in These changes nearly tripled the maximum credit amount in
2021 and made the credit available to 19- to 24-year-olds and those 65 years and older.2021 and made the credit available to 19- to 24-year-olds and those 65 years and older.4145 These temporary These temporary
changes expired as scheduled at the end of 2021.changes expired as scheduled at the end of 2021.
Figure 5 shows the number of taxpayers receiving the EITC for 1975 to shows the number of taxpayers receiving the EITC for 1975 to 20202023. Figure 6 shows shows
the amount of the EITC received, with dollar amounts adjusted for inflation to represent the amount of the EITC received, with dollar amounts adjusted for inflation to represent2020
2023 dollars. The figures show the effects of the legislative expansions of the EITC, with the credit dollars. The figures show the effects of the legislative expansions of the EITC, with the credit
experiencing growthgrowing in the late 1980s through the mid-1990s and then again in the 2000s. in the late 1980s through the mid-1990s and then again in the 2000s. (Due to
data limitations, they do not include the impact of the ARPA changes.) Beginning in 2014, the
Beginning in 2014, total credit dollars claimed total credit dollars claimedin real terms started to declinestarted to decline in real terms. It is unclear what is causing the . It is unclear what is causing the
decline. One possible explanation is that income growth among low-wage workers over this time decline. One possible explanation is that income growth among low-wage workers over this time
period has reduced the number of people qualifying for the EITC.period has reduced the number of people qualifying for the EITC.4246 Another Another possible explanation explanation
may be that eligible poor taxpayers, concerned that they may be audited, are not claiming the may be that eligible poor taxpayers, concerned that they may be audited, are not claiming the
credit.43
39 At the end of 2017, President Trump signed into law P.L. 115-97, commonly referred to as the Tax Cuts and Jobs
Act or TCJA, which made numerous changes to the federal income tax for individuals and businesses. The final law
did not make any direct changes to the EITC. The law did, however, indirectly affect the credit’s value in future years.
Parameters of the EITC (see Table 1) are indexed to inflation. Prior to P.L. 115-97, this measure of inflation was based
on the consumer price index for urban consumers (CPI-U). P.L. 115-97 changed this inflation measure to be
permanently based on the chained CPI-U (C-CPI-U). In comparison to CPI-U, chained CPI-U tends to grow more
slowly. Hence, over time, the monetary parameters of the EITC will increase more slowly.
40 For more information, see CRS Insight IN11610, The “Childless” EITC: Temporary Expansion for 2021 Under the
American Rescue Plan Act of 2021 (ARPA; P.L. 117-2), by Margot L. Crandall-Hollick.
41 ARPA also made numerous permanent changes to the EITC, which are discussed in more detail in CRS Report
R44825, The Earned Income Tax Credit (EITC): Legislative History, by Margot L. Crandall-Hollick.
42 See CRS Report R45090, Real Wage Trends, 1979 to 2019, by Sarah A. Donovan and David H. Bradley.
43 Jason DeBacker et al., “The Effects of IRS Audits on EITC Claimants,” National Tax Journal, vol. 71, no. 3
(September), pp. 451-484.
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The Earned Income Tax Credit (EITC): How It Works and Who Receives It
Figure 5. Number of Tax Returns with the EITC, 1975-2020
Source: Congressional Research Service. credit.47 Finally, family sizes have declined over time, which can reduce EITC amounts for credit recipients.48
Means, 2004 Green Book, Means, 2004 Green Book, Background Material and Data on Programs Within the Jurisdiction of the Committee on
Ways and Means, ,108th Congress, 2nd108th Congress, 2nd session, WMCP 108-6, March 2004, pp. 13-41. For 1996 and later data, session, WMCP 108-6, March 2004, pp. 13-41. For 1996 and later data,
Internal Revenue Service, Internal Revenue Service, Statistics of Income, SOI Tax Stats-Individual Statistical Tables by Size of Adjusted Gross
Income,, Table 2.5.Table 2.5.
Note: For a tabular display of this information, For a tabular display of this information,seesee Table A-1.
As shown As shown inin Figure 6, throughout the EITCthroughout the EITC’'s history, a relatively small share of the credit has s history, a relatively small share of the credit has
reduced regular federal income tax liability. In other words, the majority of credit dollars exceed reduced regular federal income tax liability. In other words, the majority of credit dollars exceed
income taxes owed after nonrefundable credits have been applied. And over time, the share of the income taxes owed after nonrefundable credits have been applied. And over time, the share of the
credit that offsets income tax liability credit that offsets income tax liability(after nonrefundable credits) has fluctuatedhas fluctuated, but generally but generally
fallendecreased. This is likely due in part to the enactment and expansion of the child . This is likely due in part to the enactment and expansion of the child tax credit, which credit, which reduced
reduces many EITC recipientsmany EITC recipients’' income tax liabilities. As income tax liabilities net of nonrefundable income tax liabilities. As income tax liabilities net of nonrefundable
credits have fallen, other tax liabilities offset by the refundable portion of the EITC have credits have fallen, other tax liabilities offset by the refundable portion of the EITC have
increased. (Only refundable credits can offset other tax liabilities, and hence these amounts are
often considered part of the refundable portion of the EITC, although they are displayed
separately in Figure 6.)
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Figure 6. Total EITC Dollars, 1975-2020
Source: Congressional Research Service. increased. ARPA led to a one-time spike in nonrefundable credits claimed in 2021.
in the IRS SOI Tax Stats Archive-1954 to 1999 Individual Income Tax Return Reports. For 1996 and later data, in the IRS SOI Tax Stats Archive-1954 to 1999 Individual Income Tax Return Reports. For 1996 and later data,
see Internal Revenue Service, see Internal Revenue Service, Statistics of Income, SOI Tax Stats-Individual Statistical Tables by Size of Adjusted Gross
Income,, Table 2.5.Table 2.5.
Notes: Constant Constant2020 dol ars2023 dollars were computed using the Consumer Price Index for were computed using the Consumer Price Index for allAll Urban Consumers Urban Consumers
(CPI-U). For a tabular display of this information, . For a tabular display of this information, seesee Table A-1.
a. The nonrefundable portion of the EITC is the amount of the credit that reduces income tax liability that a. The nonrefundable portion of the EITC is the amount of the credit that reduces income tax liability that
remains after applying nonrefundable credits (e.g., the child and dependentremains after applying nonrefundable credits (e.g., the child and dependent care credit and the nonrefundable portion credit and the nonrefundable portion
of the child tax credit).of the child tax credit).
b. The refundable portion of the EITC can offset other tax liabilities that are included on b. The refundable portion of the EITC can offset other tax liabilities that are included onan income tax income tax return,
returns, including self-employment taxes and unpaid Social Security and Medicare including self-employment taxes and unpaid Social Security and Medicarepayrol payroll taxes. Because nonrefundable taxes. Because nonrefundable
credits cannot offset these taxes, these amounts are often considered part of the refundable portion of the credits cannot offset these taxes, these amounts are often considered part of the refundable portion of the
credit.credit.
c. The refunded amount is the amount of the credit that remains after (a) and (b) described above.c. The refunded amount is the amount of the credit that remains after (a) and (b) described above.
The growth in the total amount of EITC dollars in the late 1980s to the mid-1990s was due to The growth in the total amount of EITC dollars in the late 1980s to the mid-1990s was due to
increases not only in the number of taxpayers increases not only in the number of taxpayerseligible forreceiving the credit the credit, but also in the average credit but also in the average credit
amountamount. Figure 7 shows the average EITC for 1975shows the average EITC for 1975 to 2020,-2023 in inflation-adjusted in inflation-adjusted (2020)2023 dollars. dollars.
Before the 1986 Tax Reform Act (P.L. 99-514), EITC thresholds were not indexed for inflation, Before the 1986 Tax Reform Act (P.L. 99-514), EITC thresholds were not indexed for inflation,
and the average credit lost value each year. However, the 1986 act increased the creditand the average credit lost value each year. However, the 1986 act increased the credit’'s monetary s monetary
parameters for prior inflation and adjusted the threshold amounts and maximum credits annually parameters for prior inflation and adjusted the threshold amounts and maximum credits annually
for inflation in future years. The credit formula was also revised in 1990 and then again in 1993 for inflation in future years. The credit formula was also revised in 1990 and then again in 1993
such that the amount of the credit such that the amount of the creditdepended to a certain extentpartially depended on family size. These changes on family size. These changes
resulted in an increasing average credit between the late 1980s and late 1990s. Since then, the resulted in an increasing average credit between the late 1980s and late 1990s. Since then, the
average credit has largely maintained its real value. However, increases in the average credit average credit has largely maintained its real value. However, increases in the average credit
amount in 2001 and 2009 were likely due to legislative changes that included larger credits for amount in 2001 and 2009 were likely due to legislative changes that included larger credits for
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some married claimants and for families with three or more children.44 The average EITC for
2020 was $2,276.
Figure 7. Average EITC, 1975-2020
Source: Congressional Research Service. some married claimants and for families with three or more children.49
Means, 2004 Green Book, Means, 2004 Green Book, Background Material and Data on Programs Within the Jurisdiction of the Committee on
Ways and Means, ,108th Congress, 2nd108th Congress, 2nd session, WMCP 108-6, March 2004, p. 41; and Individual Income Tax session, WMCP 108-6, March 2004, p. 41; and Individual Income Tax
Return Reports available at the IRS SOI Tax Stats Archive-1954 to 1999 Individual Income Tax Return Reports. Return Reports available at the IRS SOI Tax Stats Archive-1954 to 1999 Individual Income Tax Return Reports.
For 1996 and later data, Internal Revenue Service, For 1996 and later data, Internal Revenue Service, Statistics of Income, SOI Tax Stats-Individual Statistical Tables by
Size of Adjusted Gross Income,, Table 2.5.Table 2.5.
Notes: Constant Constant2020 dol ars2023 dollars were computed using the Consumer Price Index for were computed using the Consumer Price Index for allAll Urban Consumers Urban Consumers
(CPI-U). For a tabular display of this information, . For a tabular display of this information, seesee Table A-1.
EITC Receipt for 2020
For For20202023 (i.e., (i.e., 20202023 income tax returns filed in income tax returns filed in 2021), 26.02024), 24.4 million taxpayers ( million taxpayers (16% of all
taxpayers filing an representing 15% of individual income tax individual income tax returnreturns) received a total of $) received a total of $59.265.3 billion from the EITC. billion from the EITC.
By Number of Qualifying Children
Most EITC recipients, Most EITC recipients, andincluding those who received the most EITC dollars, were families with those who received the most EITC dollars, were families with
children.children. Figure 8 shows total EITC dollars for shows total EITC dollars for20202023 by number of qualifying children. For by number of qualifying children. For 2020,
42023, 96% of all EITC dollars were received by taxpayers with qualifying children.
% of all EITC dollars were received by taxpayers with no qualifying children and 96% were
received by taxpayers with qualifying children.
44 The increase in the value of the credit in 2009 is likely due to the changes made by the American Recovery and
Reinvestment Act of 2009 (ARRA, P.L. 111-5) which expanded the credit for families with three or more children and
increased marriage penalty relief.
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Figure 8. Distribution of Total EITC Dollars by Number of Qualifying Children,2020
Source: Congressional Research Service,2023
Source: CRS analysis based on data from the Internal Revenue Service, based on data from the Internal Revenue Service, Statistics of Income,
SOI Tax Stats-Individual Statistical Tables by Size of Adjusted Gross Income,, Table 2.5.Table 2.5.
Notes: Percentages Percentagesmaydo not sum to 100% due to rounding. not sum to 100% due to rounding. Total EITC for 2020 was $59.2 bil ion.
The total EITC amount for 2023 was $65.3 billion.
Though childless taxpayers received 4% of all EITC dollars for Though childless taxpayers received 4% of all EITC dollars for 20202023, they accounted for more , they accounted for more
than a quarter (than a quarter (2928%) of all EITC recipients. Thus, their small share of total EITC dollars %) of all EITC recipients. Thus, their small share of total EITC dollars reflects,
in part,predominantly reflects the lower credit amount available to childless filers. the lower credit amount available to childless filers.
Figure 9 shows the number of returns with the EITC for shows the number of returns with the EITC for20202023 by number of qualifying children. by number of qualifying children.
Figure 10 shows the average EITC for shows the average EITC for20202023 by number of qualifying children. The average EITC by number of qualifying children. The average EITC
for 2020 increased with the number of qualifying children:
• The EITC was received by 7.6 million taxpayers with no qualifying children,
with an average credit of $295.
• The EITC was received by 9.2 million filers with one qualifying child, with an
average credit of $2,331.
• The EITC was received by 6.0 million filers with two qualifying children, with
an average credit of $3,722.
• The EITC was received by 3.2 million filers with three or more qualifying
children, with an average credit of $4,139.
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for 2023 was larger for families with more children.Tax Returns with the EITC by Number of Qualifying Children,
2023 Source:
2020
Source: Congressional Research Service, based on data from the Internal Revenue Service, Internal Revenue Service, Statistics of Income,
SOI Tax Stats-Individual Statistical Tables by Size of Adjusted Gross Income,, Table 2.5.
Notes: Detail does not add to total because of rounding. ForTable 2.5.
Note: For additional detail on returns with the EITC by AGI and detail on returns with the EITC by AGI and
number of qualifying children, seenumber of qualifying children, see Table A-2.
2020
Source: Congressional Research Service, based on data from the 2023
Source: Internal Revenue Service, Internal Revenue Service, Statistics of Income,
SOI Tax Stats-Individual Statistical Tables by Size of Adjusted Gross Income,, Table 2.5.Table 2.5.
Note: For For additional detail on returns with the EITC by AGI and number of qualifying children, seedetail on returns with the EITC by AGI and number of qualifying children, see Table A-2.
By Income Level
Though the EITC is targeted toward lower-income Though the EITC is targeted toward lower-income earnersworkers, taxpayers with children may receive , taxpayers with children may receive
the EITC even with the EITC even withincomeincomes well above the poverty level. (The federal poverty level for a family well above the poverty level. (The federal poverty level for a family
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of three is $21,720 in 2020of three was $24,860 in 2023.) However, the largest EITC benefits are focused on low-income .) However, the largest EITC benefits are focused on low-income
earners near the poverty line, with those with greater earned income receiving reduced benefits.earners near the poverty line, with those with greater earned income receiving reduced benefits.
Figure 11 shows the number of tax returns with the EITC for shows the number of tax returns with the EITC for2020 by adjusted gross income
(AGI)2023 by AGI level level. Figure 11 shows that the $10,000-$14,999 AGI bracket accounted for the greatest shows that the $10,000-$14,999 AGI bracket accounted for the greatest
number of number of20202023 tax returns that included the EITC—4. tax returns that included the EITC—4.62 million. For million. For 20202023, about , about half (43one-third (36%) of %) of
all returns with the EITC had AGIs below $15,000. For context, a full-timeall returns with the EITC had AGIs below $15,000. For context, a full-time full-year, year-round worker worker
earning the federal minimum wage would have an AGI of $15,080.earning the federal minimum wage would have an AGI of $15,080.45
50 Figure 11 also shows the average EITC per return by AGI category. Average EITC benefits first also shows the average EITC per return by AGI category. Average EITC benefits first
increase with AGI, then decline. This outcome reflects the formula for determining the EITC, increase with AGI, then decline. This outcome reflects the formula for determining the EITC,
which provides an increasing credit up to a maximum amount, then ultimately a reduced credit as which provides an increasing credit up to a maximum amount, then ultimately a reduced credit as
it is phased out above it is phased out abovea certain income certain income threshold (seethresholds (see Table 1 and Figure 2). It also reflects a . It also reflects a
difference in the mix of family types receiving the EITC in the various AGI categories. For difference in the mix of family types receiving the EITC in the various AGI categories. For
example, nearly three-quarters (example, nearly three-quarters (7173%) of all EITC recipients with AGIs of less than $5,000 had no %) of all EITC recipients with AGIs of less than $5,000 had no
qualifying children. All EITC recipients with AGIs above $25,000 for qualifying children. All EITC recipients with AGIs above $25,000 for20202023 had qualifying had qualifying
children,children and hence were eligible for a larger maximum EITC benefit than filers without children and hence were eligible for a larger maximum EITC benefit than filers without children were. (For 2023, married couples and unmarried individuals with $25,000 of annual earnings and no qualifying children were categorically ineligible for the EITC.) For additional detail on returns with the EITC by AGI and number of qualifying children, see Table A-2.
.
For detail on returns with the EITC by AGI and number of qualifying children, see Table A-2.
45 40 hours per week for 52 weeks a year at $7.25 per hour.
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The Earned Income Tax Credit (EITC): How It Works and Who Receives It
Figure 11. Number of Tax Returns with the EITC and Average EITC per Return by
Adjusted Gross Income (AGI), 2020
Source: Congressional Research Service2023
Source: CRS analysis, based on data from the Internal Revenue Service, , based on data from the Internal Revenue Service, Statistics of Income,
SOI Tax Stats-Individual Statistical Tables by Size of Adjusted Gross Income,, Table 2.5.Table 2.5.
Notes: For For additional detail on returns with the EITC by AGI and number of qualifying children, seedetail on returns with the EITC by AGI and number of qualifying children, see Table A-2.TheThe AGI AGI
categories are defined such that the lower bound is inclusivecategories are defined such that the lower bound is inclusive, but but the upper bound is notupper bound is not inclusive. Hence AGI “$5K-
$10K”. Hence, the AGI category "$5K-$10K" includes taxpayers with includes taxpayers with AGI $5,000 or more to under $10,000.
AGIs of $5,000 to $9,999.99.
By Marital Status
The IRSThe IRS’'s National Taxpayer Advocates National Taxpayer Advocate (NTA) provided data on EITC receipt by filing status in a provided data on EITC receipt by filing status in a
special 2019 report to Congressspecial 2019 report to Congress. (The (the IRS does not routinely provide data on EITC receipt by IRS does not routinely provide data on EITC receipt by
filing status in the Statistics of Income annual data releasesfiling status in the Statistics of Income annual data releases)..) According to the According to the NTA report, for report, for
2017, unmarried taxpayers 2017, unmarried taxpayers(head of household and single filing statuses) received approximately received approximately
three-quarters of all EITC dollars, with over halfthree-quarters of all EITC dollars, with over half of the total amount (59%) received by unmarried taxpayers with one (59%) received by unmarried taxpayers with one
Congressional Research Service
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The Earned Income Tax Credit (EITC): How It Works and Who Receives It
or two qualifying childrenor two qualifying children. Figure 12 shows estimates of the distribution of total EITC dollars by shows estimates of the distribution of total EITC dollars by
marital status and number of qualifying children for 2017.marital status and number of qualifying children for 2017.
Qualifying Children, 2017
Source: National Taxpayer Advocate, National Taxpayer Advocate, Earned Income Tax Credit, Special Report to Congress, , Special Report to Congress,Volume 3.volume 3, Table Table
A.5.A.5.
By Region
For 2020, 16
For 2022 (the most recent year for which complete state-level data is available), 15% of all taxpayers received the EITC. However, the share % of all taxpayers received the EITC. However, the share of taxpayers receiving the
EITC variesvaried considerably by state. For considerably by state. For 20202022, the state with the highest percentage of , the state with the highest percentage of returns
receiving the EITCEITC returns was Mississippi, with 27% of all filers receiving the credit. In contrast, was Mississippi, with 27% of all filers receiving the credit. In contrast, 98% of % of
all taxpayers in New Hampshire received the EITC all taxpayers in New Hampshire received the EITCfor that year.
that year. (Regional data are typically released with a lag, so the most current data as of this report's publication date are for 2022 rather than for 2023.) Figure 13 provides a map showing the percentage of all provides a map showing the percentage of all20202022 federal income tax returns that federal income tax returns that
included an EITC for each state. In addition to considerable state variation, the map shows that included an EITC for each state. In addition to considerable state variation, the map shows that
there is a regional pattern to EITC receipt. A greater share of taxpayers in there is a regional pattern to EITC receipt. A greater share of taxpayers incertain southern states southern states
received the EITC than received the EITC thanthose in other regions of the country. The EITC was received on the in other regions of the country. The EITC was received on the
smallest percentage of returns in New Englandsmallest percentage of returns in New England, as well as and in some states in the northern Midwest.
some states in the northern Midwest.
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The Earned Income Tax Credit (EITC): How It Works and Who Receives It
Figure 13. Percentage of Tax Returns with the EITC by State, 2020
Source: Congressional Research Service, based on data from the Internal Revenue Service, Internal Revenue Service, Statistics of Income,
SOI Tax Stats,, Historic Table 2 (Total File, All States), Historic Table 2 (Total File, All States), at https://www.irs.gov/statistics/soi-tax-stats-historic-table-https://www.irs.gov/statistics/soi-tax-stats-historic-table-
2.
2. Notes: For details on EITC returns by state, see For details on EITC returns by state, see Table A-3.
Table A-3.
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The Earned Income Tax Credit (EITC): How It Works and Who Receives It
Appendix. Additional Tables
Table A-1. EITC Receipt, 1975-2020
2023
In millions of nominal dollars
In millions of20202023 dollars
dollars
Total Refundable
Total Refundable
Portion
Portion
Portion
Tax
Returns
with
Reduces
Reduces
EITC
Total
Refunded
Other
Average
Total
Refunded
Other
Average
Year (Millions)
EITC
Amount
Taxes
EITC
EITC
Amount
Taxes
EITC
1975
6.215 $1,250
$887
$111
$201
$6,013
$4,266
$534
$968
1976
6.473 $1,295
$935
$119
$200
$5,890
$4,253
$539
$910
1977
5.627 $1,127
$875
$106
$200
$4,811
$3,735
$454
$855
1978
5.192 $1,048
$801
$94
$202
$4,161
$3,180
$374
$801
1979
7.135 $2,052
$1,395
$161
$288
$7,315
$4,974
$574
$1,025
1980
6.954 $1,986
$1,370
$164
$286
$6,238
$4,304
$517
$897
1981
6.717 $1,912
$1,278
$181
$285
$5,443
$3,640
$515
$810
1982
6.395 $1,775
$1,222
$194
$278
$4,761
$3,276
$521
$745
1983
7.368 $1,794
$1,289
$190
$243
$4,661
$3,350
$494
$633
1984
6.376 $1,636
$1,162
$193
$257
$4,074
$2,894
$481
$639
1985
7.432 $2,088
$1,499
$209
$281
$5,021
$3,605
$503
$676
1986
7.156 $2,009
$1,479
$201
$281
$4,745
$3,491
$474
$663
1987
8.738 $3,931
$2,930
$359
$450
$8,955
$6,674
$818
$1,025
1988
11.148 $5,896
$4,257
$537
$529 $12,900
$9,314
$1,174
$1,157
1989
11.696 $6,595
$4,636
$580
$564 $13,766
$9,675
$1,211
$1,177
1990
12.542 $7,542
$5,266
$659
$601 $14,935
$10,428
$1,306
$1,191
1991
13.665 $11,105
$8,183
$840
$813 $21,102
$15,550
$1,596
$1,544
1992
14.097 $13,028
$9,959
$1,010
$924 $24,033
$18,371
$1,864
$1,705
1993
15.117 $15,537
$12,028
$1,208
$1,028 $27,828
$21,543
$2,164
$1,841
1994
19.017 $21,105
$16,598
$1,722
$1,110 $36,857
$28,985
$3,007
$1,938
1995
19.334 $25,956
$20,829
$1,981
$1,342 $44,079
$35,372
$3,364
$2,280
1996
19.464 $28,825
$23,157
$2,105
$1,481 $47,548
$38,199
$3,472
$2,443
1997
19.391 $30,389
$24,396
$2,225
$1,567 $49,002
$39,339
$3,588
$2,527
1998
20.273 $31,592
$27,002
$2,358
$1,558 $50,161
$42,873
$3,744
$2,474
1999
19.259 $31,901
$27,604
$2,379
$1,656 $49,558
$42,883
$3,696
$2,573
2000
19.277 $32,296
$27,804
$2,524
$1,675 $48,540
$41,788
$3,793
$2,518
2001
19.593 $33,376
$29,043
$2,863
$1,703 $48,775
$42,443
$4,184
$2,489
2002
21.574 $38,199
$33,737
$3,347
$1,771 $54,954
$48,535
$4,815
$2,547
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The Earned Income Tax Credit (EITC): How It Works and Who Receives It
In millions of nominal dollars
In millions of 2020 dollars
Total Refundable
Total Refundable
Portion
Portion
Tax
Returns
with
Reduces
Reduces
EITC
Total
Refunded
Other
Average
Total
Refunded
Other
Average
Year (Millions)
EITC
Amount
Taxes
EITC
EITC
Amount
Taxes
EITC
2003
22.112 $38,657
$34,012
$3,718
$1,748 $54,374
$47,841
$5,230
$2,459
2004
22.270 $40,024
$35,300
$3,957
$1,797 $54,837
$48,364
$5,421
$2,462
2005
22.752 $42,410
$37,465
$4,200
$1,864 $56,202
$49,649
$5,565
$2,470
2006
23.042 $44,388
$39,072
$4,518
$1,926 $56,984
$50,160
$5,800
$2,473
2007
24.584 $48,540
$42,508
$5,098
$1,974 $60,589
$53,060
$6,364
$2,465
2008
24.756 $50,669
$44,260
$5,438
$2,047 $60,908
$53,204
$6,537
$2,460
2009
27.041 $59,239
$53,985
$4,765
$2,191 $71,465
$65,126
$5,748
$2,643
2010
27.368 $59,562
$54,256
$4,855
$2,176 $70,694
$64,397
$5,762
$2,583
2011
27.912 $62,906
$55,350
$6,469
$2,254 $72,379
$63,685
$7,443
$2,593
2012
27.848 $64,129
$56,190
$6,726
$2,303 $72,289
$63,340
$7,582
$2,596
2013
28.822 $68,084
$59,145
$7,645
$2,362 $75,640
$65,708
$8,494
$2,624
2014
28.538 $68,339
$58,889
$8,063
$2,395 $74,712
$64,380
$8,815
$2,618
2015
28.082 $68,525
$58,795
$8,240
$2,440 $74,826
$64,201
$8,998
$2,665
2016
27.385 $66,723
$57,054
$8,266
$2,436 $71,951
$61,524
$8,914
$2,627
2017
27.030 $66,443
$56,751
$8,176
$2,458 $70,154
$59,921
$8,632
$2,595
2018
26.492 $64,924
$56,161
$8,145
$2,451 $66,915
$57,884
$8,395
$2,526
2019
26.738 $64,478
$55,672
$8,155
$2,411 $65,273
$56,359
$8,256
$2,441
2020
26.026 $59,240
$51,739
$6,816
$2,276 $59,240
$51,739
$6,816
$2,276
Total Refundable Portion
Source: Congressional Research Service. For pre-1996 data, see U.S. Congress, House Committee on Ways Congressional Research Service. For pre-1996 data, see U.S. Congress, House Committee on Ways
and Means, 2004 Green Book, and Means, 2004 Green Book, Background Material and Data on Programs Within the Jurisdiction of the Committee on
Ways and Means, ,108th108th Cong., Cong., 2nd2nd sess., WMCP 108-6, March 2004, p. 41; and Individual Income Tax Return sess., WMCP 108-6, March 2004, p. 41; and Individual Income Tax Return
Reports available at the IRS SOI Tax Stats Archive-1954 to 1999 Individual Income Tax Return Reports. For Reports available at the IRS SOI Tax Stats Archive-1954 to 1999 Individual Income Tax Return Reports. For
1996 and later data, see Internal Revenue Service, 1996 and later data, see Internal Revenue Service, Statistics of Income, SOI Tax Stats-Individual Statistical Tables by
Size of Adjusted Gross Income,, Table 2.5.Table 2.5.
Note: Constant Constant2020 dol ars2023 dollars were computed using the annual average (not seasonally adjusted) Consumer Price were computed using the annual average (not seasonally adjusted) Consumer Price
Index for all Urban Consumers Index for all Urban Consumers(CPI-U) from the Bureau of Labor Statistics.from the Bureau of Labor Statistics.
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The Earned Income Tax Credit (EITC): How It Works and Who Receives It
Table A-2. Average EITC, Number of Tax Returns with the EITC, and Total EITC
by Qualifying Children and Adjusted Gross Income, 2020
Three or
No
One
Two
More
Qualifying
Qualifying
Qualifying
Qualifying
AGI
Total
Children
Child
Children
Children
Average EITC
Less than $5,000
$857
$223
$1,923
$2,968
$3,050
$5,000 to $9,999
$1,363
$449
$2,712
$3,737
$4,312
$10,000 to $14,999
$2,004
$255
$3,403
$5,083
$5,628
$15,000 to $19,999
$3,723
$147
$3,357
$5,543
$6,342
$20,000 to $24,999
$3,938
$65
$2,969
$5,058
$5,956
$25,000 to $29,999
$3,432
$0
$2,357
$4,347
$5,133
$30,000 to $34,999
$2,612
$0
$1,608
$3,421
$4,286
$35,000 to $39,999
$1,797
$0
$868
$2,462
$3,317
$40,000 to $44,999
$1,375
$0
$466
$1,515
$2,454
$45,000 and higher
$800
$0
$0
$678
$1,065
All
$2,276
$295
$2,331
$3,722
$4,139
Tax Returns with the EITC
Less than $5,000
2,995,003
2,125,630
479,332
247,603
142,438
$5,000 to $9,999
3,491,536
2,331,093
694,609
312,877
152,959
$10,000 to $14,999
4,605,282
2,528,901
1,249,472
586,523
240,388
$15,000 to $19,999
2,969,373
567,744
1,213,817
796,323
391,490
$20,000 to $24,999
2,573,195
83,346
1,332,897
801,877
355,074
$25,000 to $29,999
2,587,027
0
1,345,767
844,368
396,892
$30,000 to $34,999
2,385,991
0
1,256,232
729,381
400,377
$35,000 to $39,999
2,095,093
0
1,070,501
659,566
365,025
$40,000 to $44,999
1,323,368
0
448,204
571,977
303,187
$45,000 and higher
999,841
0
106,935
444,488
448,418
Total
26,025,709
7,636,714
9,197,766
5,994,983
3,196,248
Total EITC ($ in Thousands)
Less than $5,000
$2,565,514
$474,603
$921,740
$734,774
$434,396
$5,000 to $9,999
$4,760,272
$1,047,569
$1,884,070
$1,169,083
$659,549
$10,000 to $14,999
$9,230,114
$644,266
$4,251,524
$2,981,497
$1,352,826
$15,000 to $19,999
$11,054,759
$83,186
$4,075,177
$4,413,688
$2,482,707
$20,000 to $24,999
$10,133,674
$5,443
$3,957,297
$4,055,946
$2,114,988
$25,000 to $29,999
$8,879,654
$0
$3,171,788
$3,670,463
$2,037,403
$30,000 to $34,999
$6,231,557
$0
$2,020,138
$2,495,554
$1,715,865
$35,000 to $39,999
$3,764,221
$0
$929,317
$1,623,978
$1,210,927
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The Earned Income Tax Credit (EITC): How It Works and Who Receives It
Three or
No
One
Two
More
Qualifying
Qualifying
Qualifying
Qualifying
AGI
Total
Children
Child
Children
Children
$40,000 to $44,999
$1,819,594
$0
$208,808
$866,747
$744,039
$45,000 and higher
$800,327
$0
$21,337
$301,261
$477,731
Total
$59,239,686
$2,255,067
$21,441,196
$22,312,991
$13,230,431
Source: Congressional Research Service, based on data from the 2023
Source: Internal Revenue Service, Internal Revenue Service, Statistics of Income,
SOI Tax Stats-Individual Statistical Tables by Size of Adjusted Gross Income,Table 2.5.
Congressional Research Service
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Table A-3. EITC Receipt by State, 2020
Percentage
Tax
of Total
Returns
Tax
Total
Percentage
Total Tax
with
Returns
EITC
Average
of Credit
State or Area
Returns
EITC
with EITC
(millions)
EITC
Refundeda
United States
164,041,940 25,553,580
16%
$58,190
$2,277
88%
Alabama
2,246,870
475,900
21%
$1,246
$2,618
90%
Alaska
359,870
45,300
13%
$91
$2,010
91%
Arizona
3,450,640
565,090
16%
$1,341
$2,372
89%
Arkansas
1,351,370
288,910
21%
$732
$2,534
90%
California
19,556,780
2,782,630
14%
$5,740
$2,063
86%
Colorado
2,934,530
332,200
11%
$678
$2,040
86%
Connecticut
1,858,430
212,650
11%
$436
$2,050
88%
Delaware
510,060
73,840
14%
$165
$2,239
91%
District of Columbia
353,430
47,270
13%
$101
$2,131
89%
Florida
11,232,230
2,221,280
20%
$5,099
$2,295
84%
Georgia
5,069,700
1,073,310
21%
$2,705
$2,521
87%
Hawaii
707,510
90,860
13%
$181
$1,994
90%
Idaho
868,550
126,450
15%
$276
$2,184
88%
Il inois
6,297,580
904,880
14%
$2,081
$2,300
88%
Indiana
3,337,840
518,830
16%
$1,188
$2,289
91%
Iowa
1,550,180
193,130
12%
$422
$2,183
90%
Kansas
1,404,880
199,160
14%
$449
$2,255
90%
Kentucky
2,076,680
384,590
19%
$895
$2,326
90%
Louisiana
2,082,460
496,170
24%
$1,320
$2,660
90%
Maine
714,510
89,950
13%
$175
$1,946
87%
Maryland
3,135,300
401,570
13%
$860
$2,141
87%
Massachusetts
3,646,160
356,180
10%
$676
$1,898
89%
Michigan
5,031,270
714,200
14%
$1,601
$2,242
89%
Minnesota
2,890,450
308,970
11%
$631
$2,043
89%
Mississippi
1,328,290
353,980
27%
$949
$2,681
90%
Missouri
3,009,120
492,500
16%
$1,134
$2,303
90%
Montana
551,690
73,590
13%
$149
$2,026
88%
Nebraska
948,280
124,640
13%
$280
$2,249
90%
Nevada
1,598,330
265,230
17%
$585
$2,206
89%
New Hampshire
744,780
67,550
9%
$123
$1,820
88%
New Jersey
4,701,870
580,100
12%
$1,241
$2,139
87%
New Mexico
995,280
196,600
20%
$454
$2,311
91%
New York
10,159,910
1,529,850
15%
$3,256
$2,128
88%
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Percentage
Tax
of Total
Returns
Tax
Total
Percentage
Total Tax
with
Returns
EITC
Average
of Credit
State or Area
Returns
EITC
with EITC
(millions)
EITC
Refundeda
North Carolina
5,077,390
917,200
18%
$2,134
$2,326
88%
North Dakota
373,520
42,320
11%
$89
$2,111
91%
Ohio
5,897,590
884,200
15%
$2,029
$2,295
90%
Oklahoma
1,780,050
341,060
19%
$826
$2,423
89%
Oregon
2,084,220
256,720
12%
$504
$1,964
89%
Pennsylvania
6,546,960
841,160
13%
$1,759
$2,091
91%
Rhode Island
576,050
74,860
13%
$153
$2,049
90%
South Carolina
2,519,240
485,360
19%
$1,159
$2,388
89%
South Dakota
443,220
58,700
13%
$126
$2,152
91%
Tennessee
3,349,310
616,380
18%
$1,467
$2,380
87%
Texas
13,788,840
2,694,970
20%
$6,939
$2,575
86%
Utah
1,495,630
183,610
12%
$397
$2,161
88%
Vermont
344,800
38,870
11%
$71
$1,826
87%
Virginia
4,245,600
591,230
14%
$1,303
$2,204
88%
Washington
3,847,130
391,300
10%
$786
$2,009
89%
West Virginia
816,790
140,020
17%
$315
$2,249
92%
Wisconsin
2,998,950
357,520
12%
$766
$2,141
91%
Wyoming
286,780
36,170
13%
$76
$2,094
90%
Other Areas
865,070
14,580
2%
$31
$2,134
96%
Table 2.5.
Percentage of Credit Refunded0
Source: Congressional Research Service, based on data from the Internal Revenue Service, Congressional Research Service, based on data from the Internal Revenue Service, Statistics of Income,
SOI Tax Stats, Historic Table 2 (Total File, All States), , Historic Table 2 (Total File, All States),at https://www.irs.gov/statistics/soi-tax-stats-historic-table-https://www.irs.gov/statistics/soi-tax-stats-historic-table-
2.
Note: Totals in this table differ slightly from totals shown in Table A-2. 2.
Note: Although the figures inAlthough the figures in Table A-2 2 and and
Table A-33 are both based on data from the IRS, the data inare both based on data from the IRS, the data in Table A-3 3 include include “"substitutes for returnssubstitutes for returns”" in which in which
the IRS constructs tax returns for certain nonfilers. the IRS constructs tax returns for certain nonfilers.“"Other AreasOther Areas”" includes, for example, returns filed from includes, for example, returns filed from
Army Post Office and Fleet Post Office addresses by members of the Armed Forces stationed overseasArmy Post Office and Fleet Post Office addresses by members of the Armed Forces stationed overseas;, returns returns
filed by other U.S. citizens abroadfiled by other U.S. citizens abroad;, and returns filed by residents of Puerto Rico with income from sources and returns filed by residents of Puerto Rico with income from sources
outside Puerto Rico or with income earned as U.S. government employees.outside Puerto Rico or with income earned as U.S. government employees.
a.
The refunded amount is the part of the refundable portion of the credit that remains after the credit has The refunded amount is the part of the refundable portion of the credit that remains after the credit has
offsetoffset both income taxes and other taxes other taxes likesuch as self-employment taxes and unpaid Social Security and Medicare self-employment taxes and unpaid Social Security and Medicare payrol taxes
col ectedpayroll taxes collected on the federal income tax return (i.e., Form 1040). on the federal income tax return (i.e., Form 1040).
Congressional Research Service
31
Table A-4. EITC Participation Rates by State,2009-2019
Participation Rate
State
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
Alabama
79.1%
78.6%
78.5%
79.8%
82.0%
82.1%
81.9%
82.1%
81.0%
79.9%
82.1%
Alaska
70.0%
70.0%
73.3%
71.9%
72.8%
76.7%
78.5%
75.6%
81.2%
76.2%
71.0%
Arizona
80.1%
76.4%
76.5%
76.7%
76.5%
77.4%
77.0%
76.6%
75.7%
74.5%
76.9%
Arkansas
81.2%
78.1%
79.5%
80.0%
80.0%
80.6%
81.6%
81.6%
80.8%
80.9%
81.7%
California
74.5%
73.4%
73.0%
73.8%
74.7%
75.8%
75.4%
74.3%
73.1%
71.0%
78.6%
Colorado
76.1%
73.5%
73.3%
74.5%
73.8%
74.5%
73.9%
73.5%
74.9%
71.6%
75.5%
Connecticut
82.1%
77.9%
78.2%
78.6%
79.2%
78.6%
78.9%
81.3%
77.7%
77.1%
79.6%
Delaware
81.4%
80.4%
78.5%
74.0%
78.5%
79.4%
82.3%
82.0%
83.6%
77.9%
79.8%
District of Columbia
75.4%
75.5%
77.3%
71.0%
82.0%
71.9%
72.2%
75.2%
76.1%
74.0%
75.0%
Florida
82.4%
81.4%
81.3%
81.7%
82.0%
82.1%
83.4%
82.8%
82.6%
81.0%
81.0%
Georgia
79.1%
77.3%
78.0%
79.9%
80.9%
81.2%
80.8%
80.8%
79.1%
79.0%
81.2%
Hawaii
83.6%
77.8%
77.8%
81.7%
80.9%
82.5%
84.9%
80.2%
79.9%
81.1%
81.8%
Idaho
81.5%
79.0%
78.5%
78.5%
78.5%
81.2%
80.1%
83.2%
78.3%
83.2%
80.1%
Il inois
77.6%
78.4%
78.2%
78.5%
78.3%
79.0%
79.2%
78.5%
77.5%
77.7%
81.5%
Indiana
80.6%
80.3%
79.8%
79.5%
81.8%
80.5%
82.8%
80.7%
80.7%
81.0%
83.0%
Iowa
81.1%
75.5%
76.9%
79.3%
78.7%
79.2%
79.6%
79.1%
78.7%
79.3%
80.8%
Kansas
78.3%
78.0%
76.0%
74.9%
77.3%
77.1%
79.8%
78.3%
79.2%
78.2%
78.0%
Kentucky
82.1%
79.9%
80.1%
81.5%
82.0%
80.5%
81.1%
82.7%
81.9%
79.6%
81.4%
Louisiana
80.9%
78.2%
77.7%
80.4%
79.2%
80.2%
80.5%
81.7%
81.4%
80.0%
80.4%
Maine
81.6%
81.7%
75.4%
77.9%
79.5%
81.0%
77.9%
81.5%
80.4%
79.3%
81.4%
Maryland
76.0%
75.6%
74.1%
78.3%
78.8%
77.6%
78.7%
78.3%
79.4%
76.4%
80.0%
Massachusetts
80.2%
78.3%
78.1%
79.4%
80.8%
80.0%
79.8%
79.7%
78.1%
77.0%
78.0%
CRS-32
Participation Rate
State
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
Michigan
80.5%
80.5%
80.4%
80.4%
80.9%
80.9%
82.0%
81.6%
81.9%
80.4%
81.0%
Minnesota
81.5%
78.4%
78.3%
78.9%
78.9%
78.7%
80.6%
79.7%
79.4%
78.0%
79.3%
Mississippi
82.6%
79.6%
80.5%
82.4%
84.8%
84.1%
84.7%
84.5%
84.3%
85.2%
83.1%
Missouri
78.9%
78.2%
78.5%
78.4%
80.7%
80.3%
80.0%
80.9%
81.0%
79.9%
80.2%
Montana
81.6%
77.7%
77.1%
78.7%
77.4%
76.0%
76.5%
78.4%
80.3%
77.3%
74.6%
Nebraska
81.4%
80.7%
77.6%
82.4%
76.9%
79.9%
78.1%
80.2%
77.6%
79.0%
83.3%
Nevada
76.4%
74.7%
74.8%
74.6%
75.3%
76.3%
75.4%
73.7%
73.6%
71.5%
76.9%
New Hampshire
78.5%
81.8%
74.3%
74.6%
80.6%
78.4%
79.9%
79.3%
81.5%
77.4%
80.3%
New Jersey
79.8%
78.1%
76.9%
77.5%
78.8%
78.6%
77.2%
79.1%
77.8%
75.7%
79.7%
New Mexico
80.1%
78.5%
78.7%
78.2%
75.3%
80.8%
82.1%
81.1%
81.8%
75.7%
81.4%
New York
81.4%
82.5%
81.4%
81.7%
82.5%
82.4%
82.9%
82.8%
82.5%
79.7%
82.6%
North Carolina
79.3%
77.7%
76.7%
79.9%
80.2%
80.0%
81.0%
81.0%
77.2%
76.9%
79.9%
North Dakota
77.2%
82.5%
77.3%
78.2%
82.9%
83.0%
80.4%
76.1%
82.4%
82.3%
80.4%
Ohio
81.0%
79.9%
80.1%
81.3%
82.3%
82.6%
82.0%
81.6%
82.5%
81.4%
82.0%
Oklahoma
77.9%
76.1%
75.4%
74.2%
76.7%
76.1%
77.5%
78.1%
78.4%
75.8%
78.2%
Oregon
79.6%
73.2%
73.1%
73.4%
75.5%
72.5%
74.4%
73.4%
72.6%
71.0%
74.7%
Pennsylvania
81.8%
80.3%
81.8%
80.9%
82.4%
82.0%
82.6%
82.2%
81.7%
81.9%
81.7%
Rhode Island
84.0%
79.2%
82.3%
85.8%
84.3%
82.8%
81.3%
81.2%
84.9%
81.0%
83.1%
South Carolina
77.7%
80.2%
77.4%
78.4%
79.6%
80.9%
81.9%
84.5%
82.0%
80.3%
81.1%
South Dakota
82.2%
82.7%
81.5%
82.8%
77.2%
82.5%
84.6%
81.1%
83.0%
84.2%
77.8%
Tennessee
79.2%
80.4%
80.4%
81.4%
81.8%
80.9%
83.2%
83.0%
82.0%
80.1%
81.2%
Texas
79.6%
78.1%
77.8%
77.8%
78.5%
79.1%
79.5%
79.1%
78.3%
76.8%
80.9%
Utah
77.1%
75.3%
75.4%
75.0%
74.9%
75.2%
76.3%
77.3%
75.3%
75.0%
78.2%
CRS-33
Participation Rate
State
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
Vermont
82.9%
78.2%
83.3%
84.0%
80.3%
80.7%
81.9%
80.6%
79.0%
82.9%
82.6%
Virginia
78.9%
78.3%
78.8%
78.7%
79.5%
80.5%
81.1%
80.7%
79.8%
79.0%
79.5%
Washington
74.4%
73.8%
74.4%
74.8%
75.3%
76.9%
78.0%
76.8%
76.4%
73.1%
76.5%
West Virginia
81.6%
81.8%
80.4%
80.9%
82.2%
83.2%
82.6%
81.1%
83.4%
83.1%
80.0%
Wisconsin
80.1%
78.0%
77.8%
79.6%
79.1%
80.0%
78.8%
78.4%
79.9%
78.3%
81.7%
Wyoming
75.1%
74.9%
77.8%
74.6%
76.9%
79.8%
78.1%
78.6%
77.7%
76.3%
73.6%
Source: IRS-ACS Match, Center for Administrative Records Research and Applications, U.S. Census Bureau in col aboration2012-2022
Source: IRS-ACS Match, Center for Administrative Records Research and Applications, U.S. Census Bureau in collaboration with IRS. Data can be found at with IRS. Data can be found at
https://www.eitc.irs.gov/eitc-central/participation-rate/eitc-participation-rate-by-stateshttps://www.eitc.irs.gov/eitc-central/participation-rate/eitc-participation-rate-by-states.
. Notes: The IRS data used in these estimates are based on the year of the tax return. In other words, 2019 data reflect tax data from 2019 income tax returns, generally The IRS data used in these estimates are based on the year of the tax return. In other words, 2019 data reflect tax data from 2019 income tax returns, generally
filed in 2020. The national EITC participation rate is estimated using the Census Bureaufiled in 2020. The national EITC participation rate is estimated using the Census Bureau’'s Current Population Survey s Current Population Survey (CPS) and hence not directly comparable to these and hence not directly comparable to these
state estimates, which are based on the American Community Surveystate estimates, which are based on the American Community Survey (ACS).
CRS-34
The Earned Income Tax Credit (EITC): How It Works and Who Receives It
Author Information
Margot L. Crandall-Hollick
Conor F. Boyle
Specialist in Public Finance
Analyst in Social Policy
Gene Falk
Specialist in Social Policy
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in
its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or
material from a third party, you may need to obtain the permission of the copyright holder if you wish to
copy or otherwise use copyrighted material.
Congressional Research Service
R43805 · VERSION 17 · UPDATED
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At the end of 2017, President Trump signed into law P.L. 115-97, commonly referred to as the Tax Cuts and Jobs Act, which made numerous changes to the federal income tax for individuals and businesses. The final law did not make any direct changes to the EITC. The law did, however, indirectly affect the credit's value in future years. Various EITC parameters (see Table 1) are indexed to inflation. Prior to P.L. 115-97, this measure of inflation was based on the CPI-U. P.L. 115-97 permanently changed this inflation measure to the chained CPI-U. In comparison to the CPI-U, the chained CPI-U tends to grow more slowly. Hence, over time, the monetary parameters of the EITC will increase more slowly than they otherwise would have.
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Contents
- Introduction
- Eligibility for the EITC
- Filing a Federal Income Tax Return
- Earned Income
- Residency Requirements
- Qualifying Children
- Age Requirements for EITC Recipients with No Qualifying Children
- Investment Income
- Disallowance of the EITC Due to Fraud or Reckless Disregard of Rules
- Identification Requirements
- Calculating the EITC
- EITC Eligibility by Poverty Status
- EITC Eligibility by Earned Income at the Federal Minimum Wage
- Payment of the EITC
- Interaction with Other Tax Provisions
- Treatment of EITC Income for Needs-Tested Benefit Programs
- Data on EITC Receipt
- Trends in EITC Receipt from 1975 to 2023
- EITC Receipt
- By Number of Qualifying Children
- By Income Level
- By Marital Status
- By Region
Figures
- Figure 1. Maximum EITC by Number of Qualifying Children, 2026
- Figure 2. EITC for an Unmarried Taxpayer with One Child, by Earned Income, 2026
- Figure 3. EITC Parameters as a Percentage of Poverty Guidelines by Marital Status and Number of Qualifying Children, 2026
- Figure 4. EITC Parameters as a Percentage of Full-Time Employment at the Federal Minimum Wage by Marital Status and Number of Qualifying Children, 2026
- Figure 5. Number of Tax Returns with the EITC, 1975-2023
- Figure 6. Total EITC Dollars, 1975-2023
- Figure 7. Average EITC, 1975-2023
- Figure 8. Distribution of Total EITC Dollars by Number of Qualifying Children, 2023
- Figure 9. Number of Returns with the EITC by Number of Qualifying Children, 2023
- Figure 10. Average EITC by Number of Qualifying Children, 2023
- Figure 11. Number of Tax Returns with the EITC and Average EITC per Return by Adjusted Gross Income (AGI), 2023
- Figure 12. Distribution of Total EITC Dollars by Marital Status and Number of Qualifying Children, 2017
- Figure 13. Percentage of Tax Returns with the EITC by State, 2022
Tables
- Table 1. EITC Parameters by Marital Status and Number of Children, 2026
- Table A-1. EITC Receipt, 1975-2023
- Table A-2. Average EITC, Number of Tax Returns with the EITC, and Total EITC by Qualifying Children and Adjusted Gross Income, 2023
- Table A-3. EITC Receipt by State, 2022
- Table A-4. EITC Participation Rates by State, 2012-2022
Appendixes
Summary
The Earned Income Tax Credit (EITC) is a refundable tax credit that boosts the incomes of eligible low-income workers, especially those with children. Because the credit ispercentage of earned income (the percentage of earned income (the
remains at its maximum level over a subsequent range of earned incomeremains at its maximum level over a subsequent range of earned income
amount) vary depending on several factors, including the number of qualifying children a taxpayer has and the amount) vary depending on several factors, including the number of qualifying children a taxpayer has and the
(1) $(1) $
7,316 for a taxpayer with two children; and (4) $for a taxpayer with two children; and (4) $
EITC Amount by Number of Qualifying Children, Marital Status, and Income,
2026
Source: CRS calculations based onCRS calculations based on IRS Revenue Procedure IRS Revenue Procedure
EITC Parameters by Marital Status and Number of Qualifying Children, 2026
Number of Qualifying Children
0
1
2
3 or more
credit rate
7.65%
34%
40%
45%
earned income amount
$8,680
$13,020
$18,290
$18,290
maximum credit amount
$664
$4,427
$7,316
$8,231
phaseout threshold amount
$10,860
$23,890
$23,890
$23,890
phaseout rate
7.65%
15.98%
21.06%
21.06%
income where credit = 0
$19,540
$51,593
$58,629
$62,974
married taxpayers (married filing jointly)
credit rate
7.65%
34%
40%
45%
earned income amount
$8,680
$13,020
$18,290
$18,290
maximum credit amount
$664
$4,427
$7,316
$8,231
phaseout amount threshold
$18,140
$31,160
$31,160
$31,160
phaseout rate
7.65%
15.98%
21.06%
21.06%
income where credit = 0
$26,820
$58,863
$65,899
$70,244
Source: IRS Revenue Procedure 2025-32 and Section 32 of the Internal Revenue Code.
federal income tax returns. Like all tax credits, the EITC can reduce income tax liability. And because the EITC is a federal income tax returns. Like all tax credits, the EITC can reduce income tax liability. And because the EITC is a
refundable tax credit, if refundable tax credit, if
portion of the credit that remains after offsetting any income tax liability) as portion of the credit that remains after offsetting any income tax liability) as
they are already receiving they are already receiving
to as the to as the refundable portion of the credit. of the credit.
words, the words, the
public benefit program for 12 months after the refund is received.public benefit program for 12 months after the refund is received.
all taxpayers filing all taxpayers filing
largest largest
families with children. There was considerable variation in EITC receipt by state, with a families with children. There was considerable variation in EITC receipt by state, with a
southern states compared to other regions of the country.southern states compared to other regions of the country.
Introduction
The Earned Income Tax Credit (EITC) is a refundable tax credit available to eligible workers with The Earned Income Tax Credit (EITC) is a refundable tax credit available to eligible workers withrelatively low earnings. Because the credit is refundable, an EITC recipient need not owe taxes to relatively low earnings. Because the credit is refundable, an EITC recipient need not owe taxes to
receive the benefit. The credit is authorized by Section 32 of the Internal Revenue Code (IRCreceive the benefit. The credit is authorized by Section 32 of the Internal Revenue Code (IRC
taxpayers received a total of $taxpayers received a total of $
eight different formulas, which vary depending on several factors, including the number of eight different formulas, which vary depending on several factors, including the number of
qualifying children a taxpayer has (zero, one, two, or three or more) and qualifying children a taxpayer has (zero, one, two, or three or more) and
(unmarried or married). All else being equal, the amount of the credit tends to increase with the (unmarried or married). All else being equal, the amount of the credit tends to increase with the
number of eligible children the EITC recipient has. Indeed, most of the EITCnumber of eligible children the EITC recipient has. Indeed, most of the EITC
EITC dollars for EITC dollars for
credit, followed by how the credit is computed and paid. The report then provides data on the credit, followed by how the credit is computed and paid. The report then provides data on the
growth of the EITC since it was first enacted in 1975. growth of the EITC since it was first enacted in 1975.
recent IRS data on the EITC from recent IRS data on the EITC from
of qualifying children, income level, tax filing status, and location of residence.of qualifying children, income level, tax filing status, and location of residence.
Eligibility for the EITC
A taxpayer must fulfill the following requirements to claim the EITC:A taxpayer must fulfill the following requirements to claim the EITC:
credit = 0credit = 0
the calculation of this threshold amount is discussed in greater detail in the section discussed in greater detail in the section
Filing a Federal Income Tax Return
A person must file a federal income tax return to be eligible for the EITC. A person must file a federal income tax return to be eligible for the EITC.
federal tax return.federal tax return.5
Earned Income
A taxpayer must have earned income to claim the EITC. Earned income for the EITC is defined A taxpayer must have earned income to claim the EITC. Earned income for the EITC is defined
as wages, tips, and other compensation included in gross income. It also includes net self-as wages, tips, and other compensation included in gross income. It also includes net self-
employment income (self-employment income after employment income (self-employment income after
payroll taxes paid by a self-employed individual). In addition, according to the payroll taxes paid by a self-employed individual). In addition, according to the
under a Medicaid waiver may treat those payments as earned income for under a Medicaid waiver may treat those payments as earned income for
EITC.EITC.
calculating the EITC. All income earned by a member of the Armed Forces while in a designated calculating the EITC. All income earned by a member of the Armed Forces while in a designated
combat zone is considered combat pay and is normally combat zone is considered combat pay and is normally not included in taxable income. However, in taxable income. However,
combat pay to calculate the EITC does not make the combat pay taxable income.)combat pay to calculate the EITC does not make the combat pay taxable income.)
include pension and annuity income, income of include pension and annuity income, income of a nonresident nonresident
income earned income earned
participation in work experience or community service activities.participation in work experience or community service activities.
Residency Requirements
Under current law, an EITC recipient must be a resident of the United States, unless the recipient Under current law, an EITC recipient must be a resident of the United States, unless the recipient
resides in another country because of U.S. military serviceresides in another country because of U.S. military service
.9 Qualifying Children
An EITC recipientAn EITC recipient
specific specific
half-brother, half-sister, half-brother, half-sister,
child must share a child must share a residence with the taxpayer for more than half the year in the United States. with the taxpayer for more than half the year in the United States.
12 Third, the child must meet certain Third, the child must meet certain age requirements;; namely, the child must be under the age of namely, the child must be under the age of
19 (or 19 (or under age 24 by the end of the tax year
taxpayer in the same household. For example, a child who lives with a single parent, grandparent, taxpayer in the same household. For example, a child who lives with a single parent, grandparent,
and aunt in the same home could be a qualifying child and aunt in the same home could be a qualifying child
one of these individuals can claim the qualifying child for the EITC, and the others cannot. In one of these individuals can claim the qualifying child for the EITC, and the others cannot. In
these cases, "tiebreaker" rules are used to determine who can claim the child.13 Age Requirements for EITC Recipients with No Qualifying
Children If a taxpayer has If a taxpayer has no qualifying children, he or she must be between 25 and 64 years of age to , he or she must be between 25 and 64 years of age to
Investment Income
A taxpayer with investment income over a certain dollar amount is ineligible for the EITC. For A taxpayer with investment income over a certain dollar amount is ineligible for the EITC. For
income (including tax-exempt interest), dividends, net rent, net capital gains, and net passive income (including tax-exempt interest), dividends, net rent, net capital gains, and net passive
income. It also includes royalties that are from sources other than the filerincome. It also includes royalties that are from sources other than the filer
activities.activities.
Disallowance of the EITC Due to Fraud or Reckless Disregard
of Rules
A taxpayer is barred from claiming the EITC for a period of 10 years after the IRS makes a final A taxpayer is barred from claiming the EITC for a period of 10 years after the IRS makes a final
determination to reduce or disallow a taxpayerdetermination to reduce or disallow a taxpayer
EITC claim. A taxpayer is barred from claiming the EITC for a period of two years after the IRS EITC claim. A taxpayer is barred from claiming the EITC for a period of two years after the IRS
determines that the individual made an EITC claim determines that the individual made an EITC claim
the rulesthe rules
those who do not have green cards or do not spend sufficient time in the United States—are those who do not have green cards or do not spend sufficient time in the United States—are
generally ineligible for the EITC.generally ineligible for the EITC.
18 Calculating the EITC
The EITC amount is based on formulas that consider earned income, number of qualifying The EITC amount is based on formulas that consider earned income, number of qualifying
children, marital status, and adjusted gross income (AGI). In general, the EITC equals a fixed children, marital status, and adjusted gross income (AGI). In general, the EITC equals a fixed
percentage (the percentage (the
EITC then remains at its maximum level over a subsequent range of earned income, between the EITC then remains at its maximum level over a subsequent range of earned income, between the
decreases decreases
income or AGI (whichever is greater) above the income or AGI (whichever is greater) above the threshold phaseout amountphaseout amount
of these EITC parameters (of these EITC parameters (
several factors, including the number of qualifying children a taxpayer has and several factors, including the number of qualifying children a taxpayer has and
status, as illustrated status, as illustrated
Table 1. EITC Parameters by Marital Status
2026 Number of Qualifying Children
0
1
2
3 or more
credit rate
7.65%
34%
40%
45%
earned income amount
$8,680
$13,020
$18,290
$18,290
maximum credit amount
$664
$4,427
$7,316
$8,231
threshold phaseout amount
$10,860
$23,890
$23,890
$23,890
phaseout rate
7.65%
15.98%
21.06%
21.06%
income where credit = 0
$19,540
$51,593
$58,629
$62,974
married taxpayers (married filing jointly)
credit rate
7.65%
34%
40%
45%
earned income amount
$8,680
$13,020
$18,290
$18,290
maximum credit amount
$664
$4,427
$7,316
$8,231
threshold phaseout amount
$18,140
$31,160
$31,160
$31,160
phaseout rate
7.65%
15.98%
21.06%
21.06%
income where credit = 0
$26,820
$58,863
$65,899
$70,244
Source: IRS Revenue Procedure 2025-32 and Section 32 of the Internal Revenue Code. One spouse in a couple filing separately can claim the credit under specific circumstances, in which case he or she files using the parameters for unmarried filers.
Figure 1. Maximum EITC by Number of Qualifying Children, 2026
Source: IRS Revenue Procedure 2025-32.
those without qualifying children, the difference in the phaseout those without qualifying children, the difference in the phaseout
versus unmarried taxpayers is $versus unmarried taxpayers is $
taxpayers reduces (but taxpayers reduces (but
whereby the credit for a married couple is less than the combined whereby the credit for a married couple is less than the combined
individuals. Figure 2 shows 2026 EITC amounts
the credit equals the the credit equals the credit rate (34% for a taxpayer with one child) times the (34% for a taxpayer with one child) times the
amount of annual earned income. The $amount of annual earned income. The $
income amount and is the level at which the EITC ceases to increase with earned and is the level at which the EITC ceases to increase with earned
income. The income interval up to the earned income amount, where the EITC income. The income interval up to the earned income amount, where the EITC
increases with earned income, is known as the increases with earned income, is known as the phase-in range..
maximum credit for a taxpayer with one childfor a taxpayer with one child
amount. The $amount. The $
single taxpayer with one child in single taxpayer with one child in
phaseout rate. The income interval from the phaseout . The income interval from the phaseout
whichever is greater) reaches $whichever is greater) reaches $
amounts and the income levels at which the EITC falls to $0 are calculated in reference to the earned income amounts and the threshold phaseout amounts, those values rise in line with inflation every year as well.
Figure 2. EITC for an Unmarried Taxpayer with One Child, by Earned
2026 Source: Congressional Research Service, based on information in IRS Revenue Procedure Congressional Research Service, based on information in IRS Revenue Procedure
Revenue CodeRevenue Code
. Notes: In this simplified example, adjusted gross income (AGI) is assumed to equal earned income. In this simplified example, adjusted gross income (AGI) is assumed to equal earned income.
income, marital status, and number of qualifying children. The instructions for the federal income income, marital status, and number of qualifying children. The instructions for the federal income
tax form show tax form show
While the EITC is available to many families who are in poverty, it is also available for many While the EITC is available to many families who are in poverty, it is also available for many
families whose families whose
Figure 3 illustrates the illustrates the
poverty guidelines. poverty guidelines.
eligibility threshold of $eligibility threshold of $
more than twice (more than twice (
Figure 3. EITC Parameters as a Percentage of Poverty Guidelines by Marital Status and
2026 Source: Congressional Research Service, based on IRS Revenue Procedure Congressional Research Service, based on IRS Revenue Procedure
. Notes: Poverty levels are based on the federal poverty guidelines for the lower 48 states. Poverty levels are based on the federal poverty guidelines for the lower 48 states.
Figure 4 expresses expresses
worker who worker who
year ($15,080 annually). For year ($15,080 annually). For
recipients are assumed to have recipients are assumed to have twice the aggregate annual earned income as unmarried the aggregate annual earned income as unmarried
recipients—$30,160. In other words, both spouses are assumed to work full timerecipients—$30,160. In other words, both spouses are assumed to work full time and year-round. The 2026
worker). In contrast, worker). In contrast,
that are higher than the federal minimum wage.that are higher than the federal minimum wage.
EITC EITC
2026 Source: Congressional Research Service, based on IRS Revenue Procedure Congressional Research Service, based on IRS Revenue Procedure
wage ($7.25 per hour), 40 hours per week, 52 weeks a year ($15,080 annuallywage ($7.25 per hour), 40 hours per week, 52 weeks a year ($15,080 annually
per worker). Notes: For For
assumed to be double the income of unmarried recipients ($15,080).assumed to be double the income of unmarried recipients ($15,080).
The EITC is provided to individuals and families annually in a lump-sum payment after a The EITC is provided to individuals and families annually in a lump-sum payment after a
taxpayer files a federal income tax return.taxpayer files a federal income tax return.
liability. And because the EITC is a refundable tax credit, if liability. And because the EITC is a refundable tax credit, if
what they owe in income taxes, they can receive the difference (the portion of the credit that what they owe in income taxes, they can receive the difference (the portion of the credit that
remains after offsetting any income tax liability) as a tax refund (or an increase in their tax remains after offsetting any income tax liability) as a tax refund (or an increase in their tax
as the as the refundable portion of the EITC, whereas the amount that reduces income tax liability is of the EITC, whereas the amount that reduces income tax liability is
referred to as the referred to as the nonrefundable portion
also offset other tax liabilities collected on the federal income tax return. These other taxes also offset other tax liabilities collected on the federal income tax return. These other taxes
include self-employment taxes and uncollected Social Security and Medicare taxes (e.g., Social include self-employment taxes and uncollected Social Security and Medicare taxes (e.g., Social
Security and Medicare taxes on unreported tip income).Security and Medicare taxes on unreported tip income).
such as the EITC, can offset other non-incomethe EITC, can offset other non-income
remains after offsetting other tax liabilities is sometimes referred to as the remains after offsetting other tax liabilities is sometimes referred to as the
taxpayer who has no income tax liability will taxpayer who has no income tax liability will
as the refundable portion of the credit (and hence exceeded income taxes owed after reducing as the refundable portion of the credit (and hence exceeded income taxes owed after reducing
income tax income tax
on or after February 15on or after February 15
of the filing year.29 Interaction with Other Tax Provisions
On the On the federal income tax form, the EITC can be found in the payments section after the lines for (1) income tax tax form, the EITC can be found in the payments section after the lines for (1) income tax
liability net of any nonrefundable credits, (2) other non-income tax paymentsliability net of any nonrefundable credits, (2) other non-income tax payments, and (3) the lines for and (3) the lines for
withholding and estimated tax payments. Nonrefundable tax credits, which withholding and estimated tax payments. Nonrefundable tax credits, which
credit,credit,
American Opportunity tax credit (AOTC).American Opportunity tax credit (AOTC).
liability and receives one or more of these credits, the liability and receives one or more of these credits, the total amount of of
unchanged, but the amount unchanged, but the amount
which exceeds income tax liability) will increase. EITC Participation Rates
indicate that taxpayers with no qualifying children have lower participation rates than those with children. indicate that taxpayers with no qualifying children have lower participation rates than those with children.
According to these data, for 2016According to these data, for 2016, an estimated 65% of eligible EITC recipients with no qualifying children claimed an estimated 65% of eligible EITC recipients with no qualifying children claimed
the the
two children, and 82% two children, and 82%
found infound in
provides information on credit receipt (after compliance measures like auditsprovides information on credit receipt (after compliance measures like audits
data include data include
Tax Credit (EITC): Administrative and Compliance Challenges
income (all else being unchanged) will result in income (all else being unchanged) will result in
and earned income, reducing a taxpayerand earned income, reducing a taxpayer
credit. For example, pretax contributions to savings accounts for retirement or medical expenses credit. For example, pretax contributions to savings accounts for retirement or medical expenses
are not included in either AGI or earned income. Hence, by making these contributions, EITC are not included in either AGI or earned income. Hence, by making these contributions, EITC
claimants whose claimants whose
their AGI or earned income for purposes of calculating the EITCtheir AGI or earned income for purposes of calculating the EITC, and thus receive and thus receive
," reducing their earned reducing their earned
noted, the credit phases in over a range of earned income, whereas it phases out based on noted, the credit phases in over a range of earned income, whereas it phases out based on
be included in earned income for purposes of calculating the EITC. However, as previously be included in earned income for purposes of calculating the EITC. However, as previously
discussed, servicemembers may elect to include their nontaxable combat pay as earned incomediscussed, servicemembers may elect to include their nontaxable combat pay as earned income
any federally funded public benefit program, including Supplemental Nutrition Assistance any federally funded public benefit program, including Supplemental Nutrition Assistance
Program Program
does not count against the resource limits of any federally funded public benefit program for 12 does not count against the resource limits of any federally funded public benefit program for 12
months after the refund is received.months after the refund is received.
Data on EITC Receipt
The EITC was first enacted in 1975 as a temporary measure meant to encourage economic The EITC was first enacted in 1975 as a temporary measure meant to encourage economic
growth in the face of the 1974 recession and rising food and energy prices. It was also originally growth in the face of the 1974 recession and rising food and energy prices. It was also originally
intended to intended to
and reducing the welfare rolls.and reducing the welfare rolls.
poverty reduction. Today the EITC is the largest poverty reduction. Today the EITC is the largest
1975 to 1975 to
2023. Trends in EITC Receipt from 1975 to
2023 When originally enacted by the Tax Reduction Act of 1975 (P.L. 94-12), the EITC was a When originally enacted by the Tax Reduction Act of 1975 (P.L. 94-12), the EITC was a
temporary refundable tax credit in effect for 1975. For that year, 6.2 million taxpayers received temporary refundable tax credit in effect for 1975. For that year, 6.2 million taxpayers received
$1.25 billion from the EITC (or $$1.25 billion from the EITC (or $
7.1 billion in 2023 dollars).42 The credit was extended several more times on a temporary basis and made permanent by the The credit was extended several more times on a temporary basis and made permanent by the
Revenue Act of 1978 (P.L. 95-600). Legislation enacted in 1986 (P.L. 99-514), 1990 (P.L. 101-Revenue Act of 1978 (P.L. 95-600). Legislation enacted in 1986 (P.L. 99-514), 1990 (P.L. 101-
508), 1993 (P.L. 103-66), 2001 (P.L. 107-16), and 2009 (P.L. 111-5) increased the amount of the 508), 1993 (P.L. 103-66), 2001 (P.L. 107-16), and 2009 (P.L. 111-5) increased the amount of the
credit by changing the credit formula. For more information on the legislative history of the credit by changing the credit formula. For more information on the legislative history of the
EITC, see CRS Report R44825, EITC, see CRS Report R44825, The Earned Income Tax Credit (EITC): Legislative History
gradually decreasing in value as earned income increased. Legislative changes to the credit made gradually decreasing in value as earned income increased. Legislative changes to the credit made
during this time generally increased the amount of the credit in a variety of ways, including during this time generally increased the amount of the credit in a variety of ways, including
by increasing the credit rate, increasing the earned income amount, increasing the phaseout amount increasing the credit rate, increasing the earned income amount, increasing the phaseout amount
threshold, and decreasing the phaseout rate.threshold, and decreasing the phaseout rate.
credit amount varied based on earned income andcredit amount varied based on earned income and
children. This revision essentially children. This revision essentially
Congress made workers Congress made workers without qualifying children eligible for the EITC for the first time, qualifying children eligible for the EITC for the first time,
As a result of this change, often referred to as As a result of this change, often referred to as
2009, the marriage penalty relief was expanded further2009, the marriage penalty relief was expanded further, and a larger credit was created for families and a larger credit was created for families
with three or more children. These 2009 changes were with three or more children. These 2009 changes were temporarily extended several times and extended several times and later made made
permanent by P.L. 114-113permanent by P.L. 114-113
.43 How Did the American Rescue Plan Act
temporary provisions designed to provide financial relief to individuals and families, including the American Rescue temporary provisions designed to provide financial relief to individuals and families, including the American Rescue
Plan Act (ARPA; P.L. 117-2). For 2021, ARPA Plan Act (ARPA; P.L. 117-2). For 2021, ARPA
and expanding the age range for eligible workers.and expanding the age range for eligible workers.
2021 and made the credit available to 19- to 24-year-olds and those 65 years and older.2021 and made the credit available to 19- to 24-year-olds and those 65 years and older.
changes expired as scheduled at the end of 2021.changes expired as scheduled at the end of 2021.
the amount of the EITC received, with dollar amounts adjusted for inflation to represent the amount of the EITC received, with dollar amounts adjusted for inflation to represent
2023 dollars. The figures show the effects of the legislative expansions of the EITC, with the credit dollars. The figures show the effects of the legislative expansions of the EITC, with the credit
Beginning in 2014, total credit dollars claimed total credit dollars claimed
decline. One possible explanation is that income growth among low-wage workers over this time decline. One possible explanation is that income growth among low-wage workers over this time
period has reduced the number of people qualifying for the EITC.period has reduced the number of people qualifying for the EITC.
may be that eligible poor taxpayers, concerned that they may be audited, are not claiming the may be that eligible poor taxpayers, concerned that they may be audited, are not claiming the
Figure 5. Number of Tax Returns with the EITC, 1975-2023 Source: For pre-1996 data, U.S. Congress, House Committee on Ways and For pre-1996 data, U.S. Congress, House Committee on Ways and
Means, 2004 Green Book, Means, 2004 Green Book, Background Material and Data on Programs Within the Jurisdiction of the Committee on
Ways and Means, ,
Internal Revenue Service, Internal Revenue Service, Statistics of Income, SOI Tax Stats-Individual Statistical Tables by Size of Adjusted Gross
Income,
Note: For a tabular display of this information, For a tabular display of this information,
reduced regular federal income tax liability. In other words, the majority of credit dollars exceed reduced regular federal income tax liability. In other words, the majority of credit dollars exceed
income taxes owed after nonrefundable credits have been applied. And over time, the share of the income taxes owed after nonrefundable credits have been applied. And over time, the share of the
credit that offsets income tax liability credit that offsets income tax liability
reduces many EITC recipientsmany EITC recipients
credits have fallen, other tax liabilities offset by the refundable portion of the EITC have credits have fallen, other tax liabilities offset by the refundable portion of the EITC have
Figure 6. Total EITC Dollars, 1975-2023 Source: For pre-1996 data, Individual Income Tax Return Reports are available For pre-1996 data, Individual Income Tax Return Reports are available
in the IRS SOI Tax Stats Archive-1954 to 1999 Individual Income Tax Return Reports. For 1996 and later data, in the IRS SOI Tax Stats Archive-1954 to 1999 Individual Income Tax Return Reports. For 1996 and later data,
see Internal Revenue Service, see Internal Revenue Service, Statistics of Income, SOI Tax Stats-Individual Statistical Tables by Size of Adjusted Gross
Income,
Notes: Constant Constant
a. The nonrefundable portion of the EITC is the amount of the credit that reduces income tax liability that a. The nonrefundable portion of the EITC is the amount of the credit that reduces income tax liability that
remains after applying nonrefundable credits (e.g., the child and dependentremains after applying nonrefundable credits (e.g., the child and dependent care credit and the nonrefundable portion credit and the nonrefundable portion
of the child tax credit).of the child tax credit).
b. The refundable portion of the EITC can offset other tax liabilities that are included on b. The refundable portion of the EITC can offset other tax liabilities that are included on
returns, including self-employment taxes and unpaid Social Security and Medicare including self-employment taxes and unpaid Social Security and Medicare
credits cannot offset these taxes, these amounts are often considered part of the refundable portion of the credits cannot offset these taxes, these amounts are often considered part of the refundable portion of the
credit.credit.
c. The refunded amount is the amount of the credit that remains after (a) and (b) described above.c. The refunded amount is the amount of the credit that remains after (a) and (b) described above.
increases not only in the number of taxpayers increases not only in the number of taxpayers
Before the 1986 Tax Reform Act (P.L. 99-514), EITC thresholds were not indexed for inflation, Before the 1986 Tax Reform Act (P.L. 99-514), EITC thresholds were not indexed for inflation,
and the average credit lost value each year. However, the 1986 act increased the creditand the average credit lost value each year. However, the 1986 act increased the credit
parameters for prior inflation and adjusted the threshold amounts and maximum credits annually parameters for prior inflation and adjusted the threshold amounts and maximum credits annually
for inflation in future years. The credit formula was also revised in 1990 and then again in 1993 for inflation in future years. The credit formula was also revised in 1990 and then again in 1993
such that the amount of the credit such that the amount of the credit
resulted in an increasing average credit between the late 1980s and late 1990s. Since then, the resulted in an increasing average credit between the late 1980s and late 1990s. Since then, the
average credit has largely maintained its real value. However, increases in the average credit average credit has largely maintained its real value. However, increases in the average credit
amount in 2001 and 2009 were likely due to legislative changes that included larger credits for amount in 2001 and 2009 were likely due to legislative changes that included larger credits for
Figure 7. Average EITC, 1975-2023 Source: For pre-1996 data, U.S. Congress, House Committee on Ways and For pre-1996 data, U.S. Congress, House Committee on Ways and
Means, 2004 Green Book, Means, 2004 Green Book, Background Material and Data on Programs Within the Jurisdiction of the Committee on
Ways and Means, ,
Return Reports available at the IRS SOI Tax Stats Archive-1954 to 1999 Individual Income Tax Return Reports. Return Reports available at the IRS SOI Tax Stats Archive-1954 to 1999 Individual Income Tax Return Reports.
For 1996 and later data, Internal Revenue Service, For 1996 and later data, Internal Revenue Service, Statistics of Income, SOI Tax Stats-Individual Statistical Tables by
Size of Adjusted Gross Income,
Notes: Constant Constant
For For
By Number of Qualifying Children
children.children. Figure 8 shows total EITC dollars for shows total EITC dollars for
Figure 8. Distribution of Total EITC Dollars by Number of Qualifying Children,
SOI Tax Stats-Individual Statistical Tables by Size of Adjusted Gross Income,
Notes: Percentages Percentages
than a quarter (than a quarter (
Figure 9 shows the number of returns with the EITC for shows the number of returns with the EITC for
Figure 10 shows the average EITC for shows the average EITC for
for 2023 was larger for families with more children.
Figure 9. Number of
2023 Source:
SOI Tax Stats-Individual Statistical Tables by Size of Adjusted Gross Income,
number of qualifying children, seenumber of qualifying children, see Table A-2.
Figure 10. Average EITC by Number of Qualifying Children,
SOI Tax Stats-Individual Statistical Tables by Size of Adjusted Gross Income,
Note: For For additional detail on returns with the EITC by AGI and number of qualifying children, seedetail on returns with the EITC by AGI and number of qualifying children, see Table A-2.
the EITC even with the EITC even with
earners near the poverty line, with those with greater earned income receiving reduced benefits.earners near the poverty line, with those with greater earned income receiving reduced benefits.
Figure 11 shows the number of tax returns with the EITC for shows the number of tax returns with the EITC for
number of number of
all returns with the EITC had AGIs below $15,000. For context, a full-timeall returns with the EITC had AGIs below $15,000. For context, a full-time
earning the federal minimum wage would have an AGI of $15,080.earning the federal minimum wage would have an AGI of $15,080.
50 Figure 11 also shows the average EITC per return by AGI category. Average EITC benefits first also shows the average EITC per return by AGI category. Average EITC benefits first
increase with AGI, then decline. This outcome reflects the formula for determining the EITC, increase with AGI, then decline. This outcome reflects the formula for determining the EITC,
which provides an increasing credit up to a maximum amount, then ultimately a reduced credit as which provides an increasing credit up to a maximum amount, then ultimately a reduced credit as
it is phased out above it is phased out above
difference in the mix of family types receiving the EITC in the various AGI categories. For difference in the mix of family types receiving the EITC in the various AGI categories. For
example, nearly three-quarters (example, nearly three-quarters (
qualifying children. All EITC recipients with AGIs above $25,000 for qualifying children. All EITC recipients with AGIs above $25,000 for
Figure 11. Number of Tax Returns with the EITC and Average EITC per Return by
SOI Tax Stats-Individual Statistical Tables by Size of Adjusted Gross Income,
Notes: For For additional detail on returns with the EITC by AGI and number of qualifying children, seedetail on returns with the EITC by AGI and number of qualifying children, see Table A-2.
categories are defined such that the lower bound is inclusivecategories are defined such that the lower bound is inclusive, but but the upper bound is notupper bound is not
special 2019 report to Congressspecial 2019 report to Congress. (The
filing status in the Statistics of Income annual data releasesfiling status in the Statistics of Income annual data releases
2017, unmarried taxpayers 2017, unmarried taxpayers
three-quarters of all EITC dollars, with over halfthree-quarters of all EITC dollars, with over half of the total amount (59%) received by unmarried taxpayers with one (59%) received by unmarried taxpayers with one
marital status and number of qualifying children for 2017.marital status and number of qualifying children for 2017.
Figure 12. Distribution of Total EITC Dollars by Marital Status and Number of
Source: National Taxpayer Advocate, National Taxpayer Advocate, Earned Income Tax Credit, Special Report to Congress, , Special Report to Congress,
A.5.A.5.
all taxpayers in New Hampshire received the EITC all taxpayers in New Hampshire received the EITC
that year. (Regional data are typically released with a lag, so the most current data as of this report's publication date are for 2022 rather than for 2023.) Figure 13 provides a map showing the percentage of all provides a map showing the percentage of all
included an EITC for each state. In addition to considerable state variation, the map shows that included an EITC for each state. In addition to considerable state variation, the map shows that
there is a regional pattern to EITC receipt. A greater share of taxpayers in there is a regional pattern to EITC receipt. A greater share of taxpayers in
received the EITC than received the EITC than
smallest percentage of returns in New Englandsmallest percentage of returns in New England
Figure 13. Percentage of Tax Returns with the EITC by State, 2022 Source:
SOI Tax Stats,
2. Notes: For details on EITC returns by state, see For details on EITC returns by state, see
In millions of
Total Refundable
Portion
Total Refundable Portion
Year
Tax Returns with EITC (Millions)
Total EITC
Refunded Amount
Reduces Other Taxes
Average EITC
Total EITC
Refunded Amount
Reduces Other Taxes
Average EITC
1975
6.215
$1,250
$887
$111
$201
$7,079
$5,022
$629
$1,139
1976
6.473
$1,295
$935
$119
$200
$6,934
$5,007
$635
$1,071
1977
5.627
$1,127
$875
$106
$200
$5,664
$4,397
$535
$1,007
1978
5.192
$1,048
$801
$94
$202
$4,899
$3,744
$440
$944
1979
7.135
$2,052
$1,395
$161
$288
$8,612
$5,856
$676
$1,207
1980
6.954
$1,986
$1,370
$164
$286
$7,344
$5,067
$608
$1,056
1981
6.717
$1,912
$1,278
$181
$285
$6,408
$4,285
$606
$954
1982
6.395
$1,775
$1,222
$194
$278
$5,606
$3,857
$613
$877
1983
7.368
$1,794
$1,289
$190
$243
$5,488
$3,944
$582
$745
1984
6.376
$1,636
$1,162
$193
$257
$4,797
$3,407
$567
$752
1985
7.432
$2,088
$1,499
$209
$281
$5,912
$4,245
$592
$795
1986
7.156
$2,009
$1,479
$201
$281
$5,587
$4,111
$559
$781
1987
8.738
$3,931
$2,930
$359
$450
$10,543
$7,858
$963
$1,207
1988
11.148
$5,896
$4,257
$537
$529
$15,187
$10,966
$1,382
$1,362
1989
11.696
$6,595
$4,636
$580
$564
$16,207
$11,391
$1,426
$1,386
1990
12.542
$7,542
$5,266
$659
$601
$17,583
$12,277
$1,537
$1,402
1991
13.665
$11,105
$8,183
$840
$813
$24,844
$18,307
$1,879
$1,818
1992
14.097
$13,028
$9,959
$1,010
$924
$28,294
$21,628
$2,194
$2,007
1993
15.117
$15,537
$12,028
$1,208
$1,028
$32,762
$25,363
$2,548
$2,167
1994
19.017
$21,105
$16,598
$1,722
$1,110
$43,393
$34,125
$3,540
$2,282
1995
19.334
$25,956
$20,829
$1,981
$1,342
$51,895
$41,644
$3,961
$2,684
1996
19.464
$28,825
$23,157
$2,105
$1,481
$55,979
$44,972
$4,088
$2,876
1997
19.391
$30,389
$24,396
$2,225
$1,567
$57,691
$46,314
$4,224
$2,975
1998
20.273
$31,592
$27,002
$2,358
$1,558
$59,056
$50,475
$4,408
$2,913
1999
19.259
$31,901
$27,604
$2,379
$1,656
$58,345
$50,486
$4,351
$3,030
2000
19.277
$32,296
$27,804
$2,524
$1,675
$57,147
$49,198
$4,466
$2,965
2001
19.593
$33,376
$29,043
$2,863
$1,703
$57,424
$49,968
$4,926
$2,931
2002
21.574
$38,199
$33,737
$3,347
$1,771
$64,698
$57,141
$5,668
$2,999
2003
22.112
$38,657
$34,012
$3,718
$1,748
$64,016
$56,324
$6,158
$2,895
2004
22.270
$40,024
$35,300
$3,957
$1,797
$64,560
$56,939
$6,383
$2,899
2005
22.752
$42,410
$37,465
$4,200
$1,864
$66,167
$58,453
$6,552
$2,908
2006
23.042
$44,388
$39,072
$4,518
$1,926
$67,088
$59,054
$6,829
$2,912
2007
24.584
$48,540
$42,508
$5,098
$1,974
$71,333
$62,468
$7,492
$2,902
2008
24.756
$50,669
$44,260
$5,438
$2,047
$71,708
$62,638
$7,696
$2,897
2009
27.041
$59,239
$53,985
$4,765
$2,191
$84,136
$76,674
$6,767
$3,111
2010
27.368
$59,562
$54,256
$4,855
$2,176
$83,229
$75,815
$6,784
$3,041
2011
27.912
$62,906
$55,350
$6,469
$2,254
$85,213
$74,978
$8,762
$3,053
2012
27.848
$64,129
$56,190
$6,726
$2,303
$85,107
$74,571
$8,926
$3,056
2013
28.822
$68,084
$59,145
$7,645
$2,362
$89,052
$77,360
$10,000
$3,090
2014
28.538
$68,339
$58,889
$8,063
$2,395
$87,959
$75,796
$10,378
$3,082
2015
28.082
$68,525
$58,795
$8,240
$2,440
$88,094
$75,585
$10,593
$3,137
2016
27.385
$66,723
$57,054
$8,266
$2,436
$84,709
$72,433
$10,495
$3,093
2017
27.030
$66,443
$56,751
$8,176
$2,458
$82,593
$70,545
$10,163
$3,056
2018
26.492
$64,924
$56,161
$8,145
$2,451
$78,781
$68,148
$9,884
$2,974
2019
26.738
$64,478
$55,672
$8,155
$2,411
$76,847
$66,353
$9,720
$2,874
2020
26.026
$59,240
$51,739
$6,816
$2,276
$59,240
$51,739
$6,816
$2,276
2021
32.216
$65,684
$48,508
$7,802
$2,039
$73,861
$54,547
$8,774
$2,293
2022
24.086
$60,069
$50,313
$8,848
$2,494
$62,542
$52,384
$9,213
$2,597
2023
24.440
$66,270
$55,883
$9,448
$2,712
$66,270
$55,883
$9,448
$2,712
and Means, 2004 Green Book, and Means, 2004 Green Book, Background Material and Data on Programs Within the Jurisdiction of the Committee on
Ways and Means, ,
Reports available at the IRS SOI Tax Stats Archive-1954 to 1999 Individual Income Tax Return Reports. For Reports available at the IRS SOI Tax Stats Archive-1954 to 1999 Individual Income Tax Return Reports. For
1996 and later data, see Internal Revenue Service, 1996 and later data, see Internal Revenue Service, Statistics of Income, SOI Tax Stats-Individual Statistical Tables by
Size of Adjusted Gross Income,
Note: Constant Constant
Index for all Urban Consumers Index for all Urban Consumers
Table A-2. Average EITC, Number of Tax Returns with the EITC, and Total EITC
|
AGI |
Total |
No Qualifying Children |
One Qualifying Child |
Two Qualifying Children |
Three or More Qualifying Children |
|
Average EITC |
|||||
|
Less than $5,000 |
$519 |
$209 |
$1,230 |
$1,600 |
$2,156 |
|
$5,000 to $9,999 |
$1,242 |
$535 |
$2,565 |
$3,124 |
$3,485 |
|
$10,000 to $14,999 |
$2,314 |
$416 |
$3,856 |
$5,003 |
$5,727 |
|
$15,000 to $19,999 |
$3,871 |
$173 |
$3,939 |
$6,478 |
$7,245 |
|
$20,000 to $24,999 |
$4,917 |
$144* |
$3,782 |
$6,313 |
$7,169 |
|
$25,000 to $29,999 |
$4,480 |
* |
$3,108 |
$5,534 |
$6,002* |
|
$30,000 to $34,999 |
$3,549 |
$0 |
$2,348 |
$4,521 |
* |
|
$35,000 to $39,999 |
$2,652 |
$0 |
$1,556 |
$3,534 |
$4,506 |
|
$40,000 to $44,999 |
$1,839 |
$0 |
$809 |
$2,563 |
$3,533 |
|
$45,000 and higher |
$1,243 |
$0 |
$0 |
$1,218 |
$1,735 |
|
All |
$2,712 |
$363 |
$2,698 |
$4,304 |
$4,848 |
|
Tax Returns with the EITC |
|||||
|
Less than $5,000 |
1,810,674 |
1,346,391 |
300,835 |
114,094 |
49,356 |
|
$5,000 to $9,999 |
2,911,399 |
2,006,156 |
577,635 |
220,559 |
107,048 |
|
$10,000 to $14,999 |
4,197,059 |
2,127,644 |
1,451,767 |
425,811 |
191,836 |
|
$15,000 to $19,999 |
3,645,645 |
1,136,274 |
1,070,264 |
949,337 |
489,768 |
|
$20,000 to $24,999 |
2,356,562 |
160,909* |
1,048,096 |
741,595 |
407,149 |
|
$25,000 to $29,999 |
1,929,137 |
* |
958,331 |
645,858 |
635,160* |
|
$30,000 to $34,999 |
1,965,361 |
0 |
1,024,692 |
629,271 |
* |
|
$35,000 to $39,999 |
1,913,449 |
0 |
1,006,865 |
594,078 |
312,506 |
|
$40,000 to $44,999 |
1,675,208 |
0 |
838,531 |
569,605 |
267,071 |
|
$45,000 and higher |
2,035,443 |
0 |
406,926 |
895,374 |
733,144 |
|
Total |
24,439,937 |
6,616,465 |
8,683,942 |
5,785,582 |
2,557,878 |
|
Total EITC ($ in Thousands) |
|||||
|
Less than $5,000 |
$940,390 |
$281,522 |
$369,901 |
$182,569 |
$106,400 |
|
$5,000 to $9,999 |
$3,616,462 |
$1,072,833 |
$1,481,479 |
$689,056 |
$373,094 |
|
$10,000 to $14,999 |
$9,711,593 |
$885,018 |
$5,597,871 |
$2,130,123 |
$1,098,579 |
|
$15,000 to $19,999 |
$14,110,784 |
$196,759 |
$4,216,016 |
$6,149,720 |
$3,548,288 |
|
$20,000 to $24,999 |
$11,587,813 |
$23,243* |
$3,963,800 |
$4,682,050 |
$2,919,017 |
|
$25,000 to $29,999 |
$8,641,592 |
* |
$2,978,715 |
$3,574,403 |
$3,812,252* |
|
$30,000 to $34,999 |
$6,974,808 |
$0 |
$2,406,097 |
$2,844,637 |
* |
|
$35,000 to $39,999 |
$5,074,395 |
$0 |
$1,566,767 |
$2,099,425 |
$1,408,203 |
|
$40,000 to $44,999 |
$3,081,341 |
$0 |
$678,121 |
$1,459,645 |
$943,575 |
|
$45,000 and higher |
$2,530,820 |
$0 |
$167,940 |
$1,090,924 |
$1,271,956 |
|
Total |
$66,269,998 |
$2,436,132 |
$23,426,707 |
$24,902,552 |
$11,669,112 |
SOI Tax Stats-Individual Statistical Tables by Size of Adjusted Gross Income,
Table 2.5.
Note: Figures marked * are combined, which the IRS does for figures representing a small number of taxpayers to prevent inadvertent disclosure of individual taxpayer information.
Table A-3. EITC Receipt by State, 2022State or Area
Total Tax Returns
Tax Returns with EITC
Percentage of Total Tax Returns with EITC
Total EITC (millions)
Average EITC
United States
159,651,330
23,692,190
15%
$59,205
$2,499
84%
Alabama
2,149,560
440,510
20%
$1,262
$2,865
88%
Alaska
348,250
38,650
11%
$82
$2,128
88%
Arizona
3,373,850
515,920
15%
$1,312
$2,542
85%
Arkansas
1,295,860
266,840
21%
$727
$2,724
87%
California
18,487,690
2,519,120
14%
$5,771
$2,291
81%
Colorado
2,972,380
302,060
10%
$658
$2,178
82%
Connecticut
1,823,240
200,860
11%
$454
$2,261
85%
Delaware
503,140
68,480
14%
$167
$2,442
88%
District of Columbia
348,690
45,200
13%
$108
$2,395
86%
Florida
11,130,320
2,035,890
18%
$5,049
$2,480
80%
Georgia
4,932,040
1,010,000
20%
$2,825
$2,797
84%
Hawaii
689,960
84,970
12%
$186
$2,188
86%
Idaho
869,500
111,860
13%
$256
$2,292
85%
Illinois
6,112,890
823,080
13%
$2,083
$2,531
84%
Indiana
3,246,780
469,900
14%
$1,166
$2,482
88%
Iowa
1,485,900
177,190
12%
$417
$2,356
88%
Kansas
1,361,370
176,390
13%
$425
$2,411
88%
Kentucky
1,975,890
354,590
18%
$897
$2,530
87%
Louisiana
1,970,500
471,100
24%
$1,396
$2,962
86%
Maine
710,860
81,740
11%
$165
$2,019
84%
Maryland
3,095,140
379,150
12%
$903
$2,381
83%
Massachusetts
3,567,790
335,060
9%
$716
$2,138
85%
Michigan
4,871,390
695,110
14%
$1,768
$2,543
85%
Minnesota
2,871,840
287,420
10%
$647
$2,251
85%
Mississippi
1,245,240
331,450
27%
$982
$2,962
87%
Missouri
2,880,050
434,870
15%
$1,085
$2,494
87%
Montana
550,380
67,140
12%
$144
$2,149
86%
Nebraska
940,690
112,520
12%
$269
$2,386
87%
Nevada
1,553,270
246,160
16%
$602
$2,446
85%
New Hampshire
731,910
59,420
8%
$116
$1,954
85%
New Jersey
4,638,510
545,770
12%
$1,302
$2,386
82%
New Mexico
987,790
185,030
19%
$451
$2,436
89%
New York
9,767,160
1,451,910
15%
$3,465
$2,386
82%
North Carolina
4,943,390
822,140
17%
$2,091
$2,543
85%
North Dakota
368,090
39,070
11%
$88
$2,254
89%
Ohio
5,692,070
818,070
14%
$2,069
$2,530
87%
Oklahoma
1,713,370
322,440
19%
$839
$2,604
86%
Oregon
2,030,990
228,960
11%
$477
$2,085
85%
Pennsylvania
6,325,490
812,680
13%
$1,921
$2,363
88%
Rhode Island
568,360
69,890
12%
$160
$2,292
86%
South Carolina
2,481,150
443,280
18%
$1,150
$2,595
86%
South Dakota
441,520
52,530
12%
$118
$2,252
89%
Tennessee
3,247,910
557,800
17%
$1,448
$2,596
84%
Texas
13,641,000
2,610,520
19%
$7,330
$2,808
83%
Utah
1,514,460
161,140
11%
$367
$2,277
85%
Vermont
336,880
35,070
10%
$68
$1,937
83%
Virginia
4,160,340
535,670
13%
$1,294
$2,415
85%
Washington
3,757,410
368,920
10%
$804
$2,180
86%
West Virginia
776,010
129,510
17%
$310
$2,393
91%
Wisconsin
2,940,980
313,960
11%
$715
$2,278
88%
Wyoming
280,750
32,550
12%
$73
$2,230
88%
SOI Tax Stats, Historic Table 2 (Total File, All States), , Historic Table 2 (Total File, All States),
Table A-
the IRS constructs tax returns for certain nonfilers. the IRS constructs tax returns for certain nonfilers.
Army Post Office and Fleet Post Office addresses by members of the Armed Forces stationed overseasArmy Post Office and Fleet Post Office addresses by members of the Armed Forces stationed overseas
filed by other U.S. citizens abroadfiled by other U.S. citizens abroad
outside Puerto Rico or with income earned as U.S. government employees.outside Puerto Rico or with income earned as U.S. government employees.
Table A-4. EITC Participation Rates by State,
|
State |
2022 |
2021 |
2020 |
2019 |
2018 |
2017 |
2016 |
2015 |
2014 |
2013 |
2012 |
|
Alabama |
79.2% |
79.8% |
74.3% |
79.1% |
78.6% |
78.5% |
79.8% |
82.0% |
82.1% |
81.9% |
82.1% |
|
Alaska |
75.1% |
75.2% |
71.7% |
70.0% |
70.0% |
73.3% |
71.9% |
72.8% |
76.7% |
78.5% |
75.6% |
|
Arizona |
78.6% |
80.2% |
76.8% |
80.1% |
76.4% |
76.5% |
76.7% |
76.5% |
77.4% |
77.0% |
76.6% |
|
Arkansas |
80.5% |
82.0% |
77.5% |
81.2% |
78.1% |
79.5% |
80.0% |
80.0% |
80.6% |
81.6% |
81.6% |
|
California |
77.4% |
79.1% |
71.2% |
74.5% |
73.4% |
73.0% |
73.8% |
74.7% |
75.8% |
75.4% |
74.3% |
|
Colorado |
77.3% |
78.0% |
72.1% |
76.1% |
73.5% |
73.3% |
74.5% |
73.8% |
74.5% |
73.9% |
73.5% |
|
Connecticut |
82.0% |
82.5% |
76.2% |
82.1% |
77.9% |
78.2% |
78.6% |
79.2% |
78.6% |
78.9% |
81.3% |
|
Delaware |
82.4% |
76.6% |
77.9% |
81.4% |
80.4% |
78.5% |
74.0% |
78.5% |
79.4% |
82.3% |
82.0% |
|
District of Columbia |
73.6% |
72.9% |
71.3% |
75.4% |
75.5% |
77.3% |
71.0% |
82.0% |
71.9% |
72.2% |
75.2% |
|
Florida |
82.0% |
82.3% |
80.2% |
82.4% |
81.4% |
81.3% |
81.7% |
82.0% |
82.1% |
83.4% |
82.8% |
|
Georgia |
82.1% |
81.3% |
77.1% |
79.1% |
77.3% |
78.0% |
79.9% |
80.9% |
81.2% |
80.8% |
80.8% |
|
Hawaii |
83.3% |
81.6% |
76.8% |
83.6% |
77.8% |
77.8% |
81.7% |
80.9% |
82.5% |
84.9% |
80.2% |
|
Idaho |
80.7% |
78.4% |
76.9% |
81.5% |
79.0% |
78.5% |
78.5% |
78.5% |
81.2% |
80.1% |
83.2% |
|
Illinois |
81.0% |
81.1% |
75.7% |
77.6% |
78.4% |
78.2% |
78.5% |
78.3% |
79.0% |
79.2% |
78.5% |
|
Indiana |
83.3% |
83.4% |
79.6% |
80.6% |
80.3% |
79.8% |
79.5% |
81.8% |
80.5% |
82.8% |
80.7% |
|
Iowa |
80.7% |
80.8% |
79.4% |
81.1% |
75.5% |
76.9% |
79.3% |
78.7% |
79.2% |
79.6% |
79.1% |
|
Kansas |
78.3% |
79.1% |
74.6% |
78.3% |
78.0% |
76.0% |
74.9% |
77.3% |
77.1% |
79.8% |
78.3% |
|
Kentucky |
82.5% |
81.3% |
78.6% |
82.1% |
79.9% |
80.1% |
81.5% |
82.0% |
80.5% |
81.1% |
82.7% |
|
Louisiana |
81.6% |
80.7% |
77.8% |
80.9% |
78.2% |
77.7% |
80.4% |
79.2% |
80.2% |
80.5% |
81.7% |
|
Maine |
85.2% |
83.4% |
77.4% |
81.6% |
81.7% |
75.4% |
77.9% |
79.5% |
81.0% |
77.9% |
81.5% |
|
Maryland |
82.2% |
80.8% |
73.4% |
76.0% |
75.6% |
74.1% |
78.3% |
78.8% |
77.6% |
78.7% |
78.3% |
|
Massachusetts |
81.7% |
81.6% |
75.7% |
80.2% |
78.3% |
78.1% |
79.4% |
80.8% |
80.0% |
79.8% |
79.7% |
|
Michigan |
82.8% |
80.2% |
73.7% |
80.5% |
80.5% |
80.4% |
80.4% |
80.9% |
80.9% |
82.0% |
81.6% |
|
Minnesota |
81.9% |
80.3% |
76.6% |
81.5% |
78.4% |
78.3% |
78.9% |
78.9% |
78.7% |
80.6% |
79.7% |
|
Mississippi |
80.2% |
82.4% |
81.7% |
82.6% |
79.6% |
80.5% |
82.4% |
84.8% |
84.1% |
84.7% |
84.5% |
|
Missouri |
79.3% |
80.5% |
77.3% |
78.9% |
78.2% |
78.5% |
78.4% |
80.7% |
80.3% |
80.0% |
80.9% |
|
Montana |
75.1% |
80.4% |
76.4% |
81.6% |
77.7% |
77.1% |
78.7% |
77.4% |
76.0% |
76.5% |
78.4% |
|
Nebraska |
83.2% |
79.8% |
80.9% |
81.4% |
80.7% |
77.6% |
82.4% |
76.9% |
79.9% |
78.1% |
80.2% |
|
Nevada |
82.2% |
77.5% |
69.2% |
76.4% |
74.7% |
74.8% |
74.6% |
75.3% |
76.3% |
75.4% |
73.7% |
|
New Hampshire |
80.0% |
80.2% |
78.4% |
78.5% |
81.8% |
74.3% |
74.6% |
80.6% |
78.4% |
79.9% |
79.3% |
|
New Jersey |
81.1% |
80.4% |
74.7% |
79.8% |
78.1% |
76.9% |
77.5% |
78.8% |
78.6% |
77.2% |
79.1% |
|
New Mexico |
83.6% |
84.7% |
78.1% |
80.1% |
78.5% |
78.7% |
78.2% |
75.3% |
80.8% |
82.1% |
81.1% |
|
New York |
83.7% |
81.3% |
77.8% |
81.4% |
82.5% |
81.4% |
81.7% |
82.5% |
82.4% |
82.9% |
82.8% |
|
North Carolina |
79.7% |
80.0% |
77.0% |
79.3% |
77.7% |
76.7% |
79.9% |
80.2% |
80.0% |
81.0% |
81.0% |
|
North Dakota |
79.6% |
81.0% |
76.2% |
77.2% |
82.5% |
77.3% |
78.2% |
82.9% |
83.0% |
80.4% |
76.1% |
|
Ohio |
82.6% |
82.2% |
78.7% |
81.0% |
79.9% |
80.1% |
81.3% |
82.3% |
82.6% |
82.0% |
81.6% |
|
Oklahoma |
79.1% |
78.0% |
75.7% |
77.9% |
76.1% |
75.4% |
74.2% |
76.7% |
76.1% |
77.5% |
78.1% |
|
Oregon |
78.4% |
75.2% |
67.9% |
79.6% |
73.2% |
73.1% |
73.4% |
75.5% |
72.5% |
74.4% |
73.4% |
|
Pennsylvania |
82.8% |
82.9% |
77.7% |
81.8% |
80.3% |
81.8% |
80.9% |
82.4% |
82.0% |
82.6% |
82.2% |
|
Rhode Island |
82.4% |
84.8% |
82.1% |
84.0% |
79.2% |
82.3% |
85.8% |
84.3% |
82.8% |
81.3% |
81.2% |
|
South Carolina |
80.7% |
83.2% |
80.6% |
77.7% |
80.2% |
77.4% |
78.4% |
79.6% |
80.9% |
81.9% |
84.5% |
|
South Dakota |
82.3% |
77.6% |
77.4% |
82.2% |
82.7% |
81.5% |
82.8% |
77.2% |
82.5% |
84.6% |
81.1% |
|
Tennessee |
82.0% |
81.2% |
78.6% |
79.2% |
80.4% |
80.4% |
81.4% |
81.8% |
80.9% |
83.2% |
83.0% |
|
Texas |
80.6% |
81.7% |
76.1% |
79.6% |
78.1% |
77.8% |
77.8% |
78.5% |
79.1% |
79.5% |
79.1% |
|
Utah |
75.4% |
78.5% |
76.9% |
77.1% |
75.3% |
75.4% |
75.0% |
74.9% |
75.2% |
76.3% |
77.3% |
|
Vermont |
80.0% |
85.5% |
79.3% |
82.9% |
78.2% |
83.3% |
84.0% |
80.3% |
80.7% |
81.9% |
80.6% |
|
Virginia |
82.2% |
80.9% |
77.6% |
78.9% |
78.3% |
78.8% |
78.7% |
79.5% |
80.5% |
81.1% |
80.7% |
|
Washington |
77.4% |
76.2% |
70.6% |
74.4% |
73.8% |
74.4% |
74.8% |
75.3% |
76.9% |
78.0% |
76.8% |
|
West Virginia |
85.1% |
84.3% |
86.8% |
81.6% |
81.8% |
80.4% |
80.9% |
82.2% |
83.2% |
82.6% |
81.1% |
|
Wisconsin |
78.9% |
80.0% |
76.9% |
80.1% |
78.0% |
77.8% |
79.6% |
79.1% |
80.0% |
78.8% |
78.4% |
|
Wyoming |
78.6% |
81.8% |
83.9% |
75.1% |
74.9% |
77.8% |
74.6% |
76.9% |
79.8% |
78.1% |
78.6% |
https://www.eitc.irs.gov/eitc-central/participation-rate/eitc-participation-rate-by-stateshttps://www.eitc.irs.gov/eitc-central/participation-rate/eitc-participation-rate-by-states
. Notes: The IRS data used in these estimates are based on the year of the tax return. In other words, 2019 data reflect tax data from 2019 income tax returns, generally The IRS data used in these estimates are based on the year of the tax return. In other words, 2019 data reflect tax data from 2019 income tax returns, generally
filed in 2020. The national EITC participation rate is estimated using the Census Bureaufiled in 2020. The national EITC participation rate is estimated using the Census Bureau
state estimates, which are based on the American Community Surveystate estimates, which are based on the American Community Survey
.
Margot Crandall-Hollick and Conor F. Boyle contributed to earlier versions of this report.
Footnotes
A taxpayer without qualifying children who can be claimed as a dependent on another person's tax return is ineligible for the EITC. Claimants without qualifying children must also live in the United States for over half the year.
The SSN must be issued to a citizen of the United States or pursuant to a provision of the Social Security Act relating to the lawful admission for employment in the United States. See IRC §32(m).
For information on the distinctions between these tax filing statuses, see CRS In Focus IF13143, Federal Tax Filing Statuses.
As a result of the American Rescue Plan Act (ARPA; P.L. 117-2), a married individual who files a tax return separately from his or her spouse can claim the EITC if the individual lives with a child for whom he or she can claim the EITC for more than half the year and either (1) does not have the same principal place of abode as his or her spouse for the last half of the year or (2) has a decree, instrument, or agreement and does not live with his or her spouse at the end of the year.
The most recent version of this form can be found at https://www.irs.gov/forms-pubs/about-schedule-eic-form-1040.
These payments are provided to individual care providers for the care of eligible individuals under a state Medicaid Home and Community-Based Services waiver program described in §1915(c) of the Social Security Act and are not subject to federal taxation. See IRS Notice 2014-7; IRS, Certain Medicaid Waiver Payments May Be Excludable from Income, February 23, 2015, https://www.irs.gov/individuals/certain-medicaid-waiver-payments-may-be-excludable-from-income; and Feigh v. Commissioner, No. 20163-17, 152 T.C. 267, May 15, 2019.
For more information, see IRS, "Military and Clergy Rules for the Earned Income Tax Credit," https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/special-eitc-rules.
See IRC §32(c)(1)(C) and IRS, "Earned Income Tax Credit (EITC)," https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit-eitc.
ARPA permanently provided the U.S. Treasury with the authority to make payments to Puerto Rico, American Samoa, and mirror-code territories for amounts those territories pay out in their own territorial EITCs.
If an individual is the qualifying child of another person, that qualifying child cannot claim his or her own EITC. For more information, see IRS, "Earned Income Tax Credit (EITC)."
If placed by an authorized agency or court order.
Qualifying children who reside with servicemembers who are stationed outside the United States while serving on extended active duty with the U.S. Armed Forces are considered to reside in the United States.
See IRC §152(c)(4). Under tiebreaker rules, a child who can be claimed as an EITC qualifying child of more than one taxpayer is generally treated as the EITC qualifying child of (by order of application): (1) the parents if they file a joint return and claim the child as a qualifying child; (2) the parent if only one of the persons is the child's parent and the parent claims the child as a qualifying child; (3) the parent with whom the child lived for the longer period of time during the tax year if two of the persons are the child's parents, they do not file a joint return together, and both parents attempt to claim the child; (4) the parent with the highest AGI if the child lived with each parent for the same amount of time during the tax year, they do not file a joint return together, and both parents claim the child; (5) the person with the highest AGI if no parent can claim the child as a qualifying child; or (6) the person with the highest AGI if a parent may claim the child as a qualifying child but no parent claims the child as a qualifying child, but only if that person has an AGI higher than any parent who may claim the child as a qualifying child. For applications of the tiebreaker rules and answers to common questions, see IRS, "Publication 596 (2025), Earned Income Credit (EIC)," https://www.irs.gov/publications/p596#en_US_2025_publink1000298172.
See IRS Revenue Procedure 2025-32. In 2020 and 2021, the threshold was $3,650. This amount was permanently increased by ARPA to $10,000 in 2021 and annually adjusted for inflation thereafter.
See IRC §32(k).
For more information on SSNs valid for work purposes, see SSA, Social Security Number for Noncitizens, https://www.socialsecurity.gov/pubs/EN-05-10096.pdf; CRS Report R43840, Federal Income Taxes and Noncitizens: Frequently Asked Questions; archived CRS Report R44290, Legal Authority for Aliens to Claim Refundable Tax Credits: In Brief; and CRS Report R47483, Noncitizen Eligibility for Employment Authorization and Work-Authorized Social Security Numbers (SSNs).
See IRC §32(m).
Nonresident aliens may be eligible to claim the credit if they are married to U.S. citizens or resident aliens, make the election to be treated as resident aliens, and file married joint returns. For more information on the tax treatment of nonresident aliens, see CRS Report RS21732, Federal Taxation of Aliens Working in the United States, by Erika K. Lunder (available to congressional clients upon request); and CRS Report R43840, Federal Income Taxes and Noncitizens: Frequently Asked Questions.
A taxpayer's earned income may exceed AGI if the taxpayer qualifies for above-the-line tax deductions, and a taxpayer's AGI may exceed earned income if he or she receives dividend income, interest payments, or other sources of "unearned" income.
The tables for tax year 2025 can be found at https://www.irs.gov/publications/p1040#d0e40925.
Information provided by the Department of Labor indicates that 30 states, the District of Columbia, Puerto Rico, Guam, and the U.S. Virgin Islands have minimum wages above $7.25. Twenty states, American Samoa, and the Northern Mariana Islands have minimum wages equal to the federal minimum wage, minimum wages below the federal minimum wage, or no minimum wage standard. The 13 states that have state minimum wages that equal the federal minimum wage of $7.25 an hour are Iowa, Idaho, Indiana, Kansas, Kentucky, North Carolina, North Dakota, New Hampshire, Oklahoma, Pennsylvania, Texas, Utah, and Wisconsin. Seven states have no minimum wage or one lower than the federal wage: Alabama, Georgia, Louisiana, Mississippi, South Carolina, Tennessee, and Wyoming. In these states, employers subject to the Fair Labor Standards Act must pay the current federal minimum wage of $7.25 per hour. For more information, see the Department of Labor's "Consolidated Minimum Wage Table" at https://www.dol.gov/agencies/whd/mw-consolidated.
Based on data from the IRS for the 2023 tax year, there were a total of 9.7 million returns with the EITC filed by residents in these 20 states with $28.2 billion in total EITC claims (about 48% of all EITC dollars for 2023). See IRS, "SOI Tax Stats—Historic Table 2," 2023 tax year, https://www.irs.gov/statistics/soi-tax-stats-historic-table-2.
Before 2011, any person with a qualified child eligible for the EITC could elect to receive advance payment of the credit through the employer's payroll withholding system by filing an eligibility certificate (Form W-5) with his or her employer. The option was little used and was eliminated by P.L. 111-226.
Other taxes include uncollected Social Security and Medicare taxes due on compensation of an employee that was treated as an independent contractor by an employer. There are a variety of other taxes collected on the federal income tax return. Generally, these taxes are more likely to be paid by higher-income taxpayers who would not receive the EITC. They include additional penalty taxes on individual retirement accounts and other qualified retirement accounts or other tax-favored accounts, household employment taxes, repayment of the first-time homebuyer credit, and the 0.9% additional Medicare tax on higher-income taxpayers.
IRS Statistics of Income Table 3.3, accessed May 20, 2026, https://www.irs.gov/statistics/soi-tax-stats-individual-statistical-tables-by-size-of-adjusted-gross-income.
This sum does not equal the total due to rounding.
Congress has sometimes allowed certain taxpayers to use older earned income in computing their EITCs (and the refundable portion of the child tax credit, known as the additional child tax credit or ACTC). In other words, if the most recent earned income results in a smaller credit than the previous year's earned income, the taxpayer may use that older earned income to calculate the EITC and the ACTC. For a discussion, see "EITC/CTC Credit Computation Look-Back" in CRS Report R45864, Tax Policy and Disaster Recovery. Most recently, P.L. 116-260 included a provision allowing taxpayers to use 2019 earned income (as opposed to 2020 earned income) in calculating their 2020 EITCs and ACTCs. This provision was meant to prevent taxpayers who lost earned income during the COVID-19 pandemic from also losing EITC benefits (or receiving fewer EITC benefits), which would have compounded after-tax income losses for some low-wage workers during that period.
The Protecting Americans from Tax Hikes (PATH) Act (Division Q of P.L. 114-113) prevents a taxpayer from claiming the EITC for any year in which the filer did not have an SSN on or before the due date of the tax return for that year. This provision prevents a filer who obtains an SSN from retroactively claiming the EITC for any prior open tax years (generally three years) when the filer did not have an SSN at the time those years' returns were due.
This was effective beginning with returns filed in 2017 (i.e., 2016 income tax returns). See Section 201 of the PATH Act.
CRS Report R41967, Higher Education Tax Benefits: Brief Overview and Budgetary Effects.
See CRS Report R44993, Child and Dependent Care Tax Benefits: How They Work and Who Receives Them
See CRS In Focus IF11159, The Retirement Savings Contribution Credit and the Saver's Match.
For more information on the child tax credit, see CRS Report R41873, The Child Tax Credit: How It Works and Who Receives It.
See CRS Report R42561, The American Opportunity Tax Credit: Overview, Analysis, and Policy Options. Congressional offices may contact Brendan McDermott for more information on this topic.
Center for Administrative Records Research and Applications, U.S. Census Bureau in collaboration with IRS. Data can be found at https://www.eitc.irs.gov/eitc-central/participation-rate/eitc-participation-rate-by-states.
National Taxpayer Advocate, Earned Income Tax Credit, Special Report to Congress, Volume 3, Figure A.7.
Robert Greenstein, "Targeting vs. Universalism, and Other Factors That Affect Social Programs' Political Strength and Durability," Brookings Institution, August 2022, p. 23, https://www.brookings.edu/wp-content/uploads/2022/08/20220806_ES_THP_SocialPrograms_ExpandedEdition.pdf.
IRS, "Tax Credits for Individuals: What They Mean and How They Can Help Refunds," April 2023, https://www.irs.gov/newsroom/tax-credits-for-individuals-what-they-mean-and-how-they-can-help-refunds.
In contrast, if their pre-contribution incomes place them on the plateau or in the phase-in range, decreasing their earned incomes by making certain pretax savings contributions may either decrease or not impact their credit amounts.
The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (P.L. 111-312) included a provision that made tax refunds, including those resulting from the EITC, disregarded in the administration of federal programs and federally assisted programs. At the end of 2012, this provision was made permanent by the American Taxpayer Relief Act of 2012 (P.L. 112-240). See IRC §6409.
U.S. Congress, Senate Committee on Finance, Tax Reduction Act of 1975, report to Accompany H.R. 2166, 94th Cong., 1st sess., March 17, 1975, S. Rept. 94-36, p. 33.
Dollar values for 2023 were obtained by comparing 1975 and 2023 price levels as reported by the unchained consumer price index for all urban consumers (CPI-U), available at https://fred.stlouisfed.org/graph/?g=1WI5x.
For more information, see CRS Insight IN11610, The "Childless" EITC: Temporary Expansion for 2021 Under the American Rescue Plan Act of 2021 (ARPA; P.L. 117-2).
ARPA also made numerous permanent changes to the EITC, which are discussed in more detail in CRS Report R44825, The Earned Income Tax Credit (EITC): Legislative History.
See CRS Report R45090, Real Wage Trends, 1979 to 2019.
Jason DeBacker et al., "The Effects of IRS Audits on EITC Claimants," National Tax Journal, vol. 71, no. 3 (September 2018), pp. 451-484, https://doi.org/10.17310/ntj.2018.3.02.
Gretchen Livingston, "Family Size Among Mothers," Pew Research Center, May 7, 2015, https://www.pewresearch.org/social-trends/2015/05/07/family-size-among-mothers/.
The increase in the credit's value in 2009 is likely due to the changes made by ARRA, which expanded the credit for families with three or more children and increased marriage penalty relief.
40 hours per week for 52 weeks a year at $7.25 per hour.