Introduced in 1975, the Earned Income Tax Credit (EITC) is celebrating its 50th anniversary in this 2025 tax season. EITC provides financial relief to millions of working families and individuals with low to moderate incomes. In the previous Tax Season, 2024, approximately 23 million workers and families received about $64 billion from EITC, with the average recipient receiving $2,743.
The EITC has made significant updates to its program to benefit taxpayers in this filing season of 2025. Below are the several changes that taxpayers must be aware of.
- Increased Maximum Credit
The maximum credit has increased to $7,830 (up from $7,430 in 2023) for taxpayers with three or more qualifying children. For taxpayers with two qualifying children, the credit is up to $6,804. For taxpayers with one qualifying child, it is up to $3,995. The maximum credit for taxpayers with no qualifying children is $600 (up from $560). Individuals without children are eligible for the EITC, which provides credit even if they do not have dependents.
- Broader Eligibility
Income limits have been increased a little for the 2025 tax season, making EITC available to a greater pool of eligible workers, particularly those with modest incomes. Investment income must be $11,600 or less to qualify for EITC, ensuring that the people who earn money from investments will also qualify for the credit.
- Tax Refunds for Eligible Workers
For qualifying workers, EITC can provide a significant refund, reducing tax payments or even resulting in a refund if no taxes are payable. Even those workers without children owe no federal income tax, they may be eligible for a return through the EITC.
- Enhanced Filing Procedures with IP PIN
To combat identity theft and streamline processing, the IRS now allows taxpayers to electronically file returns even if a dependent has been claimed on a separate, previously filed return. This is possible if the primary taxpayer on the subsequent return includes a valid Identity Protection Personal Identification Number (IP PIN). This change aims to reduce processing times and expedite refunds for those affected by duplicate dependent claims. Taxpayers without an IP PIN will have their e-filed returns rejected if a dependent has already been claimed by another filer. To obtain an IP PIN, taxpayers can use the IRS’s online tool, ensuring they have this six-digit number to protect their tax filings.
Who is Eligible for the EITC in Tax Season 2025?
The EITC is designed to benefit low-to-moderate-income workers, particularly those with children. Eligibility for the 2024 tax year (filed in Tax Season 2025) depends on income level, filing status, and the number of qualifying children.
Basic Eligibility Requirements:
- Must have earned income from employment, self-employment, or certain disability payments.
- Investment income must be $11,600 or less for the tax year 2024.
- Must have a valid Social Security number for themselves, their spouse (if filing jointly), and any qualifying children.
- Cannot file as “Married Filing Separately.”
- Must be a U.S. citizen or resident alien all year.
- Cannot claim foreign earned income exclusion.
How to Claim the EITC
Step 1: Determine Eligibility: Use the IRS EITC Assistant Tool to confirm eligibility. Workers also may visit the Child-related tax benefits comparison page to learn more about basic eligibility rules for the EITC and several other tax credits
Step 2: File a Federal Tax Return: Even if not required to file due to low income, taxpayers must file a tax return (Form 1040) and include Schedule EIC if they have qualifying children.
Step 3: Provide Required Information: Include earned income details (W-2s, 1099s, self-employment records). If claiming children, provide Social Security numbers and details proving residency.
Step 4: Choose E-File for Faster Processing: E-file with Direct Deposit for the fastest refund.
Step 5: Expect Delayed Refunds If Claiming EITC: Due to anti-fraud measures, the IRS cannot issue refunds before mid-February if the return includes EITC or Additional Child Tax Credit (ACTC).
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