The Tax Credit That Rewards Work: What Every Working American Should Know About the EITC

It’s not welfare—it’s a reward for showing up and doing your job. But many eligible workers are leaving money on the table.

Maria clocks in at 6 a.m. every morning at the hospital where she works as a certified nursing assistant. She works part-time and earns $32,000 a year—enough to keep the lights on and feed her two kids, but not much more. Last year, she nearly skipped filing her taxes. “I figured I wouldn’t owe anything, so why bother?” she says. 

What Maria didn’t know was that she was walking away from $7,152.

That money—nearly a quarter of her annual salary—was waiting for her through a federal program called the Earned Income Tax Credit, or EITC. It’s one of America’s most powerful anti-poverty tools, yet an estimated 20% of eligible workers never claim it, either because they don’t know about it or mistakenly believe they don’t qualify.

Think of the EITC as the government’s way of saying “thank you” for working. Created nearly 50 years ago with bipartisan support, it’s designed to help low- and moderate-income workers keep more of what they earn. Unlike other tax benefits that simply reduce what you owe, the EITC is refundable—meaning even if you don’t owe any taxes, you can still get money back.

And the rewards can be substantial. For the 2025 tax year (returns filed in early 2026), working families can receive anywhere from $649 to $8,046, depending on their income and number of children. Even workers without children can qualify—a fact many don’t realize.

Here’s the fundamental rule that distinguishes the EITC from traditional public assistance: you must have earned income. The credit literally has “earned income” in its name for a reason.

Earned income includes:

• Wages from a job (W-2 income)
• Self-employment income from running a business or gig work
• Tips and commissions
• Certain Union strike benefits
• Certain disability benefits

What doesn’t count? Unemployment benefits, Social Security retirement benefits, child support, investment income, or other “unearned” income sources. The message is clear: this benefit exists because you’re working and contributing to the economy.

For 2025, single workers without children can claim the EITC if they earn less than $19,104. Married couples with three or more children qualify with incomes up to $68,675.

The basic eligibility requirements are straightforward:

• Have earned income from working
• Have your earned income and adjusted gross income below certain limits
• Have investment income below $11,950
• Be a U.S. citizen or resident alien for the entire year
• Have a valid Social Security number
• Not be claimed as a dependent on someone else’s return

If you have children, they must meet age, relationship and residency tests. Generally, your child must:

• Be under 19 (or under 24 if a full-time student)
• Live with you for more than half the year in the United States
• Be your son, daughter, stepchild, foster child, sibling, or grandchild

If you don’t have children, you must:

• Be at least 25 but under 65 years old
• Live in the U.S. for more than half the year
• Not be claimed as a qualifying child on someone else’s return

The EITC is structured so that your credit increases as your earnings rise, reaches a maximum, then gradually phases out as your income climbs higher. Here’s what workers could receive for 2025:

No qualifying children: Up to $649

Income limit: $19,104 (single) or $26,214 (married filing jointly)

One qualifying child: Up to $4,328

Income limit: $50,434 (single) or $57,554 (married filing jointly)

Two qualifying children: Up to $7,152

Income limit: $57,310 (single) or $64,430 (married filing jointly)

Three or more qualifying children: Up to $8,046

Income limit: $61,555 (single) or $68,675 (married filing jointly)

For families living paycheck to paycheck, these amounts can be transformative. They can cover several months of groceries, a car repair that’s been put off, a security deposit on a better apartment, or contributions to a child’s college fund.

Let’s say you’re single with two children and earned $35,000 in 2025. After your standard deduction and child tax credits, you might not owe any federal income tax at all. With most tax credits, that would be the end of the story—no tax owed, no benefit received.

But the EITC is different. Because it’s refundable, you could still receive the full $7,152—even though you didn’t owe $7,152 in taxes. The IRS will send you that money as a refund check or direct deposit.

This is what makes the EITC such a powerful anti-poverty tool. Before the pandemic, the EITC and child tax credit together lifted 10.6 million people above the poverty line, including 5.5 million children.

Despite its value, millions of eligible workers never claim the EITC. Some don’t know it exists. Others believe they won’t qualify. Still others avoid filing taxes altogether because they’re intimidated by the process or assume they won’t owe anything.

Claiming the EITC requires filing a federal tax return—Form 1040. If you have qualifying children, you’ll also need to file Schedule EIC, which asks for basic information about each child.

The IRS strongly recommends filing electronically, and for good reason. Tax software automatically:

• Checks your eligibility
• Calculates the credit accurately
• Reduces errors that could delay your refund
• Speeds up processing—especially if you choose direct deposit

Free filing options are available for workers with modest incomes through the IRS Free File program and Volunteer Income Tax Assistance (VITA) sites across the country.

Here’s another fact many workers don’t know: you have three years to file and claim the EITC from your return’s due date. That means if you didn’t file for 2022, 2023, or 2024, but you were eligible those years, you can still file those returns and claim the credit.

Thirty-one states, plus Washington D.C. and Puerto Rico, have their own versions of the EITC that supplement the federal credit. These state credits are typically calculated as a percentage of your federal EITC.

If you worked in 2025—whether you logged 40 hours a week at a factory, drove for a ride-share company, cleaned houses, bagged groceries, or cared for other people’s children—check your eligibility for the EITC. You earned your paycheck through your labor.

You might have earned a significant tax refund, too.

---

Resources:

Check your eligibility: Visit IRS.gov and search for “EITC Assistant”

Find free tax preparation help: Search “VITA sites near me” or call 800-906-9887

Learn more: IRS Publication 596, “Earned Income Credit”

File electronically: IRS Free File is available for workers earning less than $79,000

Don’t let another year go by without claiming what you’ve earned