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

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 is refundable, an EITC recipient need not owe income taxes to receive the benefit. Eligibility for and the amount of the EITC are based on a variety of factors, including 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 residency and taxpayer ID requirements. Taxpayers with incomes above certain thresholds are ineligible for the credit. These income thresholds vary based on marital status and number of qualifying children.

The EITC depends on a recipient's earned income. Specifically, the EITC phases in as a percentage of earned income (the "credit rate") until the credit amount reaches its maximum level. The EITC then remains at its maximum level over a subsequent range of earned income between the "earned income amount" and the "threshold phaseout amount." Finally, the credit gradually decreases to zero at a fixed rate (the "phaseout rate") for each additional dollar of adjusted gross income (AGI) (or earned income, whichever is greater) above the threshold phaseout amount. 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 taxpayer's marital status, as illustrated in the figure and table below. For 2026, the maximum EITC amounts are (1) $664 for a taxpayer without children in the household; (2) $4,427 for a taxpayer with one child; (3) $7,316 for a taxpayer with two children; and (4) $8,231 for a taxpayer with three or more children.

EITC Amount by Number of Qualifying Children, Marital Status, and Income, 2026

Source: CRS calculations based on IRS Revenue Procedure 2025-32 and Section 32 of the Internal Revenue Code.

EITC Parameters by Marital Status and Number of Qualifying Children, 2026

The EITC is provided to individuals and families once a year 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 refundable tax credit, if taxpayers' EITCs are 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 tax refunds (or increases in their tax refunds if they are already receiving refunds). The amount of the credit that exceeds income tax liability is sometimes referred to as the refundable portion of the credit.

The amount of the credit a taxpayer receives in a given tax filing year is based on the prior year's earned income and family composition. In other words, the 2025 EITC is based on 2025 earned income (and other 2025 factors) but will not be paid until tax returns are filed in 2026.

The EITC is not counted as income in determining eligibility for or the amount of any federally funded public benefit programs. 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.

According to the most recent IRS data, for 2023 (i.e., 2023 income tax returns filed in 2024), 24.4 million taxpayers (15% of all taxpayers filing individual income tax returns) received a total of $65.3 billion from the EITC, making the credit the largest needs-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 disproportionate share filed in certain southern states compared to other regions of the country.

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Introduction

The Earned Income Tax Credit (EITC) is a refundable tax credit available to eligible workers with 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 (IRC) and administered as part of the federal income tax system. According to Internal Revenue Service (IRS) data, 24 million taxpayers received a total of $66 billion from the EITC for 2023, making the credit the largest needs-tested antipoverty program that provides cash benefits.

Under current law, the EITC is calculated based on a recipient's earned income, using one 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 marital status (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 EITC's benefits—96% of EITC dollars for 2023—went to families with children.

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 growth of the EITC since it was first enacted in 1975. It concludes with the most recent IRS data on the EITC from 2023 income tax returns, examining EITC receipt by number 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:

• 1. The taxpayer must file a federal income tax return.
• 2. The taxpayer must have earned income.
• 3. The taxpayer must meet certain residency requirements.
• 4. The taxpayer's children must meet relationship, residency, and age requirements to be considered qualifying children for the credit.
• 5. Childless workers who claim the credit must be between ages 25 and 64. For childless married couples, at least one spouse must fall within this age range.¹ (This requirement does not apply to EITC claimants with qualifying children.)
• 6. The taxpayer's investment income must be below a certain amount.
• 7. The taxpayer must not be disallowed the credit due to prior fraud or reckless disregard of the rules when previously attempting to claim the EITC.
• 8. Taxpayers must provide Social Security Numbers (SSNs) for themselves, their spouses, and any children for whom the credit is claimed.²

Additionally, a taxpayer with income above a certain dollar amount (labeled as "income where credit = 0" in Table 1) will not be eligible for the credit. Given that this income level is dependent on the number of qualifying children and marital status of the taxpayer, the calculation of this threshold amount is discussed in greater detail in the section titled "Calculating the EITC."

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.

The EITC can be claimed by married 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 child's name and SSN on a separate schedule (Schedule EIC) filed with the federal tax return.⁵

Earned Income

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-employment income (self-employment income after deducting 50% of Social Security payroll taxes paid by a self-employed individual). In addition, according to the IRS, those who provide care for disabled individuals and receive certain nontaxable payments under a Medicaid waiver may treat those payments as earned income for purposes of the EITC.⁶

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 combat zone is considered combat pay and is normally not included in taxable income. However, a 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 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 EITC. These include pension and annuity income, income of a nonresident alien not from a U.S. business, income earned for work in a prison while incarcerated, and Temporary Assistance for Needy Families (TANF) benefits paid in exchange for participation in work experience or community service activities.

Finally, taxpayers who claim the foreign earned income exclusion (i.e., they file Form 2555 or Form 2555EZ) are ineligible for the EITC.⁸

Residency Requirements

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 service.⁹

Qualifying Children

An EITC recipient's qualifying child must meet three requirements.¹⁰ First, the child must have a specific relationship to the taxpayer (being a son, daughter, stepchild or foster child,¹¹ brother, sister, half-brother, half-sister, stepbrother, stepsister, or descendent of such a relative). Second, the child must share a residence with the taxpayer for more than half the year in the United States.¹² Third, the child must meet certain age requirements; namely, the child must be under the age of 19 (or under age 24 by the end of the tax year, 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 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 for all three of these individuals. But only 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 no qualifying children, he or she must be between 25 and 64 years of age to claim 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 2026, the limit is $12,200.¹⁴ Investment income is defined as interest 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 filer's ordinary business 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 determination to reduce or disallow a taxpayer'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 determines that the individual made an EITC claim "due to reckless and intentional disregard of the rules" of the EITC but such 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. Nonresident aliens—those who do not have green cards or do not spend sufficient time in the United States—are generally ineligible for the EITC.¹⁸

Calculating the EITC

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 percentage (the "credit rate") 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 "earned income amount" and the "phaseout threshold amount." Finally, the credit gradually decreases at a fixed rate (the "phaseout rate") for each additional dollar of earned income or AGI (whichever is greater) above the threshold phaseout amount.¹⁹ The values of these EITC parameters (credit rate, earned income amount, etc.) vary depending on several factors, including the number of qualifying children a taxpayer has and marital status, as illustrated in Table 1.

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.

Figure 1. Maximum EITC by Number of Qualifying Children, 2026

Source: IRS Revenue Procedure 2025-32.

The threshold phaseout amount varies by both the number of qualifying children a taxpayer has and his or her marital status. The phaseout threshold amount for married joint filers is $7,270 greater than for unmarried taxpayers with the same number of children in 2026. For those without qualifying children, the difference in the phaseout threshold amount among married versus unmarried taxpayers is $7,280. (Except in certain cases, married separate filers are ineligible for the EITC.) This higher threshold phaseout amount for married taxpayers reduces (but does not eliminate) "marriage penalties" in the EITC whereby the credit for a married couple is less than the combined credits of two unmarried individuals.

Figure 2 shows 2026 EITC amounts by earned income level for an unmarried taxpayer with one child. The figure illustrates three distinct income ranges for this family:

• Phase-in range: The EITC increases with earned income from the first dollar of earned income up to earned income of $13,020. Over this earned income range, the credit equals the credit rate (34% for a taxpayer with one child) times the amount of annual earned income. The $13,020 threshold is called the earned income amount 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 increases with earned income, is known as the phase-in range.
• Plateau: The EITC remains at its maximum level of $4,427 from the earned income amount ($13,020) until $23,890 of AGI or earned income. The $4,427 amount represents the maximum credit for a taxpayer with one child. The income interval for the maximum EITC value represents the plateau in Figure 2.
• Phaseout range: Once AGI (or if greater, earned income) exceeds $23,890, the EITC is reduced by 15.98 cents for every additional dollar over that amount. The $23,890 threshold is known as the phaseout threshold amount for a single taxpayer with one child in 2026. The 15.98% rate is known as the phaseout rate. The income interval from the phaseout threshold amount until the EITC falls to $0 is known as the phaseout range.

The EITC is completely phased out once the taxpayer's AGI (or earned income, whichever is greater) reaches $51,593. The earned income amounts and the threshold phaseout amounts are adjusted each year for inflation. Because the maximum credit 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 Income, 2026

Source: Congressional Research Service, based on information in IRS Revenue Procedure 2025-32 and Section 32 of the Internal Revenue Code. Notes: 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 amounts based on their income, marital status, and number of qualifying children. The instructions for the federal income tax form show EITC amounts in tables with income brackets (in $50 increments).²⁰

EITC Eligibility by Poverty Status

While the EITC is available to many families who are in poverty, it is also available for many families whose incomes place them above the federal poverty guidelines. The income level at which the credit reaches $0 is sometimes referred to as the eligibility threshold.

As illustrated by the two rows labeled "income where credit = 0" in Table 1, there are eight eligibility thresholds that depend on a taxpayer's number of qualifying children and marital status. The eligibility thresholds vary every year because they are based on two credit parameters—the maximum credit and the phaseout threshold amount—that are adjusted annually for inflation.

Figure 3 illustrates the 2026 EITC parameters in Table 1 as percentages of the 2026 federal poverty guidelines. Households below the guidelines generally qualify for the EITC. For example, the poverty guideline for a family of three in 2026 was $27,320. Families of three with income at or below this amount are considered poor. The EITC eligibility threshold of $58,629 for an unmarried person filing with two qualifying children was more than twice (215%) the poverty guideline for a family of that size.

Figure 3. EITC Parameters as a Percentage of Poverty Guidelines by Marital Status and Number of Qualifying Children, 2026

Source: Congressional Research Service, based on IRS Revenue Procedure 2025-32, Section 32 of the Internal Revenue Code, and the 2026 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.

EITC Eligibility by Earned Income at the Federal Minimum Wage

Figure 4 expresses the same eligibility thresholds from the previous figure as a percentage of the earned income of a worker who is paid the federal minimum wage ($7.25 per hour) while working 40 hours per week, 52 weeks a year ($15,080 annually). For purposes of the calculations in Figure 4, married EITC recipients are assumed to have twice the aggregate annual earned income as unmarried recipients—$30,160. In other words, both spouses are assumed to work full time and year-round.

The 2026 EITC is available to filers with children who have earned income from $0 to between 1.95 to 4.18 times the annual earnings from a minimum wage job (195% to 418% of $15,080 per worker). In contrast, a childless married couple with two full-time workers making the federal minimum wage would be ineligible for the EITC. Of note, the majority of states (30) have minimum wages that are higher than the federal minimum wage.²¹ In 2023, about four out of 10 returns that included the EITC were filed by residents of the 20 states with a minimum wage of $7.25 an hour.²²

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

Source: Congressional Research Service, based on IRS Revenue Procedure 2025-32, Section 32 of the Internal Revenue Code, and the earned income of one or two workers employed at the federal minimum wage ($7.25 per hour), 40 hours per week, 52 weeks a year ($15,080 annually per worker). Notes: For 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).

Payment of the EITC

The EITC is provided to individuals and families annually in a lump-sum payment after a taxpayer files a federal income tax return.²³ Like all tax credits, the EITC can reduce income tax liability. And because the EITC is a refundable tax credit, if taxpayers' EITCs are 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 a tax refund (or an increase in their tax refunds if they are already receiving refunds).

The amount of the credit that remains after offsetting any income tax liability is often referred to as the refundable portion of the EITC, whereas the amount that reduces income tax liability is referred to as the nonrefundable portion. The refundable portion can 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 Security and Medicare taxes on unreported tip income).²⁴ Generally, only refundable credits, such as the EITC, can offset other non-income-tax liabilities. The amount of the refundable portion that remains after offsetting other tax liabilities is sometimes referred to as the "refunded" amount. A taxpayer who has no income tax liability will have the entire EITC refunded.

Of the total aggregate amount of the EITC received for 2023, $65.3 billion, the following amounts went to refunds and tax offsets:

• $0.9 billion offset income tax liabilities;
• $9.4 billion offset other taxes collected on income tax returns; 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 as the refundable portion of the credit (and hence exceeded income taxes owed after reducing income tax liabilities 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's return includes an EITC, that refund will be made on or after February 15 of the filing year.²⁹

Interaction with Other Tax Provisions

On the federal income 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 payments, and (3) the lines for withholding and estimated tax payments. Nonrefundable tax credits, which reduce income tax liability, include the Lifetime Learning credit,³⁰ the child and dependent care credit,³¹ a savings credit,³² and the nonrefundable portions of both the child credit³³ and the American Opportunity tax credit (AOTC).³⁴ If an EITC-eligible family has any income tax liability and receives one or more of these credits, the total amount of the EITC will remain unchanged, but the amount the family receives as a refund (i.e., the amount which exceeds income tax liability) will increase.

For taxpayers whose income places them in the "phaseout range" of the credit, reducing their income (all else being unchanged) will result in larger EITCs. A variety of forms of income can be excluded from both AGI and earned income, reducing a taxpayer's AGI and earned income for purposes of calculating the 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 claimants whose pre-contribution incomes place them in the credit's phaseout range may reduce their AGI or earned income for purposes of calculating the EITC, and thus receive larger credits.³⁹

By contrast, for taxpayers whose earned incomes place them in the credit's "phase-in range," reducing their earned incomes (all else unchanged) results in smaller EITCs. (As previously noted, the credit phases in over a range of earned income, whereas it phases out based on AGI or earned income, whichever is greater.) 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 discussed, servicemembers may elect to include their nontaxable combat pay as earned income for calculating the EITC. Generally, servicemembers whose non-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, any federally funded public benefit program, including Supplemental Nutrition Assistance Program food assistance, low-income housing, Medicaid, Supplemental Security Income, and TANF.⁴⁰ An EITC that is saved by the filer does not count against the resource limits of any federally funded public benefit program for 12 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 growth in the face of the 1974 recession and rising food and energy prices. It was also originally intended to "assist in encouraging people to obtain employment, reducing the unemployment rate, and reducing the welfare rolls."⁴¹ Over time, the list of EITC objectives has grown to include poverty reduction. Today the EITC is the largest needs-tested, antipoverty cash benefit program. This section first provides a historical overview of the growth of the EITC from 1975 to 2023, the most recent year for which comprehensive data are available. It then examines information on EITC receipt for 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 temporary refundable tax credit in effect for 1975. For that year, 6.2 million taxpayers received $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 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 credit by changing the credit formula. For more information on the legislative history of the EITC, see CRS Report R44825, The Earned Income Tax Credit (EITC): Legislative History.

Before 1990, the credit amount was calculated as a percentage of earned income ("the credit rate") up through 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 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 threshold, and decreasing the phaseout rate.

Beginning in 1990 and more substantially in 1993, the credit formula was revised such that the credit amount varied based on earned income and the number of qualifying children. This revision essentially made the credit more substantial for larger families. In addition, in 1993, Congress made workers without qualifying children eligible for the EITC for the first time, though the credit for such workers was smaller than for those with qualifying children.

In 2001, the credit formula was revised again so that it also varied based on marital status. As a result of this change, often referred to as "marriage penalty relief," certain married taxpayers began receiving larger credits than did unmarried taxpayers with the same number of children. In 2009, the marriage penalty relief was expanded further, and a larger credit was created for families with three or more children. These 2009 changes were temporarily extended several times and later made permanent by P.L. 114-113.⁴³

Figure 5 shows the number of taxpayers receiving the EITC for 1975 to 2023. Figure 6 shows 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 growing in the late 1980s through the mid-1990s and then again in the 2000s. Beginning in 2014, total credit dollars claimed started to decline in real terms. It is unclear what is causing the 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.⁴⁶ Another explanation may be that eligible poor taxpayers, concerned that they may be audited, are not claiming the credit.⁴⁷ Finally, family sizes have declined over time, which can reduce EITC amounts for credit recipients.⁴⁸

Figure 5. Number of Tax Returns with the EITC, 1975-2023

Source: For pre-1996 data, U.S. Congress, House Committee on Ways and Means, 2004 Green Book, Background Material and Data on Programs Within the Jurisdiction of the Committee on Ways and Means, 108th Congress, 2nd session, WMCP 108-6, March 2004, pp. 13-41. 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. Note: For a tabular display of this information, see Table A-1.

As shown in Figure 6, throughout the EITC'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 income taxes owed after nonrefundable credits have been applied. And over time, the share of the credit that offsets income tax liability has fluctuated but generally decreased. This is likely due in part to the enactment and expansion of the child tax credit, which reduces many EITC recipients' 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 increased. ARPA led to a one-time spike in nonrefundable credits claimed in 2021.

Figure 6. Total EITC Dollars, 1975-2023

Source: 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, see Internal Revenue Service, Statistics of Income, SOI Tax Stats-Individual Statistical Tables by Size of Adjusted Gross Income, Table 2.5. Notes: Constant 2023 dollars were computed using the Consumer Price Index for All Urban Consumers. For a tabular display of this information, see Table A-1. 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 dependent care credit and the nonrefundable portion of the child tax credit). b. The refundable portion of the EITC can offset other tax liabilities that are included on income tax returns, including self-employment taxes and unpaid Social Security and Medicare payroll taxes. Because nonrefundable credits cannot offset these taxes, these amounts are often considered part of the refundable portion of the credit. 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 increases not only in the number of taxpayers receiving the credit but also in the average credit amount. Figure 7 shows the average EITC for 1975-2023 in inflation-adjusted 2023 dollars. 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 credit's monetary 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 such that the amount of the credit partially depended on family size. These changes 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 amount in 2001 and 2009 were likely due to legislative changes that included larger credits for some married claimants and for families with three or more children.⁴⁹

Figure 7. Average EITC, 1975-2023

Source: For pre-1996 data, U.S. Congress, House Committee on Ways and Means, 2004 Green Book, Background Material and Data on Programs Within the Jurisdiction of the Committee on Ways and Means, 108th Congress, 2nd 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. 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. Notes: Constant 2023 dollars were computed using the Consumer Price Index for All Urban Consumers. For a tabular display of this information, see Table A-1.

EITC Receipt

For 2023 (i.e., 2023 income tax returns filed in 2024), 24.4 million taxpayers (representing 15% of individual income tax returns) received a total of $65.3 billion from the EITC.

By Number of Qualifying Children

Most EITC recipients, including those who received the most EITC dollars, were families with children. Figure 8 shows total EITC dollars for 2023 by number of qualifying children. For 2023, 96% of all EITC dollars were received by taxpayers with qualifying children.

Figure 8. Distribution of Total EITC Dollars by Number of Qualifying Children, 2023

Source: CRS analysis 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. Notes: Percentages do not sum to 100% due to rounding. The total EITC amount for 2023 was $65.3 billion.

Though childless taxpayers received 4% of all EITC dollars for 2023, they accounted for more than a quarter (28%) of all EITC recipients. Thus, their small share of total EITC dollars predominantly reflects the lower credit amount available to childless filers.

Figure 9 shows the number of returns with the EITC for 2023 by number of qualifying children. Figure 10 shows the average EITC for 2023 by number of qualifying children. The average EITC for 2023 was larger for families with more children.

Figure 9. Number of Returns with the EITC by Number of Qualifying Children, 2023

Source: Internal Revenue Service, Statistics of Income, SOI Tax Stats-Individual Statistical Tables by Size of Adjusted Gross Income, Table 2.5. Note: For additional detail on returns with the EITC by AGI and number of qualifying children, see Table A-2.

Figure 10. Average EITC by Number of Qualifying Children, 2023

Source: Internal Revenue Service, Statistics of Income, SOI Tax Stats-Individual Statistical Tables by Size of Adjusted Gross Income, Table 2.5. Note: For additional detail 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 workers, taxpayers with children may receive the EITC even with incomes well above the poverty level. (The federal poverty level for a family of three was $24,860 in 2023.) However, the largest EITC benefits are focused on low-income 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 2023 by AGI level. Figure 11 shows that the $10,000-$14,999 AGI bracket accounted for the greatest number of 2023 tax returns that included the EITC—4.2 million. For 2023, about one-third (36%) of all returns with the EITC had AGIs below $15,000. For context, a full-time, year-round worker 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 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 it is phased out above certain income thresholds (see Table 1 and Figure 2). It also reflects a difference in the mix of family types receiving the EITC in the various AGI categories. For example, nearly three-quarters (73%) of all EITC recipients with AGIs of less than $5,000 had no qualifying children. All EITC recipients with AGIs above $25,000 for 2023 had qualifying 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.

Figure 11. Number of Tax Returns with the EITC and Average EITC per Return by Adjusted Gross Income (AGI), 2023

Source: CRS analysis, 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. Notes: For additional detail on returns with the EITC by AGI and number of qualifying children, see Table A-2. The AGI categories are defined such that the lower bound is inclusive, but the upper bound is not. Hence, the AGI category "$5K-$10K" includes taxpayers with AGIs of $5,000 to $9,999.99.

By Marital Status

The IRS's National Taxpayer Advocate provided data on EITC receipt by filing status in a special 2019 report to Congress. (The IRS does not routinely provide data on EITC receipt by filing status in the Statistics of Income annual data releases.) According to the report, for 2017, unmarried taxpayers received approximately three-quarters of all EITC dollars, with over half of the total amount (59%) received by unmarried taxpayers with one or two qualifying children. Figure 12 shows estimates of the distribution of total EITC dollars by marital status and number of qualifying children for 2017.

Figure 12. Distribution of Total EITC Dollars by Marital Status and Number of Qualifying Children, 2017

Source: National Taxpayer Advocate, Earned Income Tax Credit, Special Report to Congress, volume 3, Table A.5.

By Region

For 2022 (the most recent year for which complete state-level data is available), 15% of all taxpayers received the EITC. However, the share varied considerably by state. For 2022, the state with the highest percentage of EITC returns was Mississippi, with 27% of all filers receiving the credit. In contrast, 8% of 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 2022 federal income tax returns 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 southern states received the EITC than in other regions of the country. The EITC was received on the smallest percentage of returns in New England and in some states in the northern Midwest.

Figure 13. Percentage of Tax Returns with the EITC by State, 2022

Source: Internal Revenue Service, Statistics of Income, SOI Tax Stats, Historic Table 2 (Total File, All States), https://www.irs.gov/statistics/soi-tax-stats-historic-table-2. Notes: For details on EITC returns by state, see Table A-3.

Appendix. Additional Tables

Margot Crandall-Hollick and Conor F. Boyle contributed to earlier versions of this report.

Footnotes

1.	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.
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).
3.	For information on the distinctions between these tax filing statuses, see CRS In Focus IF13143, Federal Tax Filing Statuses.
4.	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.
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.
7.	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.
8.	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.
9.	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.
10.	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)."
11.	If placed by an authorized agency or court order.
12.	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.
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 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.
14.	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.
15.	See IRC §32(k).
16.	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).
17.	See IRC §32(m).
18.	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.
19.	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.
20.	The tables for tax year 2025 can be found at https://www.irs.gov/publications/p1040#d0e40925.
21.	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.
22.	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.
23.	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.
24.	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.
25.	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.
26.	This sum does not equal the total due to rounding.
27.	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.
28.	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.
29.	This was effective beginning with returns filed in 2017 (i.e., 2016 income tax returns). See Section 201 of the PATH Act.
30.	CRS Report R41967, Higher Education Tax Benefits: Brief Overview and Budgetary Effects.
31.	See CRS Report R44993, Child and Dependent Care Tax Benefits: How They Work and Who Receives Them
32.	See CRS In Focus IF11159, The Retirement Savings Contribution Credit and the Saver's Match.
33.	For more information on the child tax credit, see CRS Report R41873, The Child Tax Credit: How It Works and Who Receives It.
34.	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.
35.	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.
36.	National Taxpayer Advocate, Earned Income Tax Credit, Special Report to Congress, Volume 3, Figure A.7.
37.	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.
38.	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.
39.	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.
40.	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.
41.	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.
42.	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.
43.	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.
44.	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).
45.	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.
46.	See CRS Report R45090, Real Wage Trends, 1979 to 2019.
47.	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.
48.	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/.
49.	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.
50.	40 hours per week for 52 weeks a year at $7.25 per hour.