The EITC is a subsidy the federal government provides to those who work but earn very little. For 2018, the IRS has provided a table for income limits—numbers are up slightly from 2017. There are other changes, and important provisions, as well. Here is a look at the new tax table. The numbers are limits above which no EITC can be claimed.
|
If filing as … |
Qualifying Children Claimed |
|||
|
Zero
|
One |
Two |
Three or more |
|
|
Single, head of household or widowed |
$15,310 |
$40,402 |
$45,898 |
$49,298 |
|
Married, filing jointly |
$21,000 |
$46,102 |
$51,598 |
$54,998 |
There is also an investment income limit of $3,500.
The actual amount of the credit depends on the number of children, and it may be substantial. For the 2018 tax year, the maximum amount of credit is:
- $6,444 with three or more qualifying children
- $5,728 with two qualifying children
- $3,468 with one qualifying child
- $520 with no qualifying children
Who Is a Qualifying Child?
This is where it can get complicated, and it pays to know the details before making assumptions about who is or isn’t included. According to the IRS, a qualifying child can include:
- Your son or daughter (whether biological or adopted).
- A stepchild.
- A foster child.
- Any descendant of the above, such as a grandchild.
The IRS also notes that a qualifying child doesn’t have to be a descendent: a qualifying child can include full, half and step siblings or any of their descendants.
However, despite the flexibility of definitions, there are strict age limitations. At the end of the filing year, a child must be younger than you and younger than 19. However, the IRS will give a pass to children up to 24 years old if they’re full-time students. There are no age limits for children who are permanently and totally disabled.
Residency restrictions also apply: A child must live with you (or your spouse, if you file a joint return) in the United States for more than half of the year. For the purposes of this law, the United States includes only the 50 states and the District of Columbia, not Puerto Rico or any U.S. possessions.
Working With the IRS
Although it would seem straightforward, the EITC can be complex to navigate, and those who claim it often find themselves with a lot of communications from the IRS. Even a minor discrepancy between what’s on the return and what the IRS has on file can prevent your getting a credit you believe you’re entitled to.
