Publication 596 (2023), Earned Income Credit (EIC) | Internal Revenue Service

Introduction

Welcome to the guide on the Earned Income Credit (EIC) provided by the Internal Revenue Service (IRS). This publication aims to provide you with all the necessary information to understand and claim the EIC. The EIC is a tax credit designed to benefit certain individuals who work and have earned income below a certain threshold. This credit can reduce the amount of tax you owe and may even result in a refund.

Table of Contents

• Future Developments
• What Is the EIC?
• Can I Claim the EIC?
• Do I Need This Publication?
• Do I Have To Have a Child To Qualify for the EIC?
• How Do I Figure the Amount of EIC?
• How Can I Quickly Locate Specific Information?
• Is There Help Online?
• What's New for 2023
• Reminders
• Rules for Everyone
• Rules if You Have a Qualifying Child
• Rules If You Do Not Have a Qualifying Child
• Figuring and Claiming the EIC
• Disallowance of the EIC
• Detailed Examples
• How To Get Tax Help

Future Developments

For the latest information about developments related to Pub. 596, such as legislation enacted after it was published, visit IRS.gov/Pub596.

What Is the EIC?

The Earned Income Credit (EIC) is a tax credit available to individuals who work and have earned income below a certain threshold. This credit can reduce the amount of tax you owe and may even result in a refund.

Can I Claim the EIC?

To claim the EIC, you must meet certain rules. These rules are summarized in Table 1.

Table 1. Earned Income Credit in a Nutshell

Do I Need This Publication?

Certain individuals who file Form 1040 or 1040-SR must use Worksheet 1 in this publication instead of Step 2 in their Form 1040 instructions when determining their eligibility for the EIC. You need this publication if any of the following statements apply to you for 2023:

• You are filing Schedule E (Form 1040).
• You are reporting income from the rental of personal property not used in a trade or business.
• You are reporting income on Schedule 1 (Form 1040), line 8z, from Form 8814 (relating to election to report child's interest and dividends).
• You have income or loss from a passive activity.
• You are reporting an amount on Form 1040 or 1040-SR, line 7, that includes an amount from Form 4797.

If none of the statements above apply to you, your tax form instructions may have all the information you need to determine your eligibility for the EIC and calculate your credit. However, you can still refer to this publication to learn more about the EIC.

Do I Have To Have a Child To Qualify for the EIC?

No, you can qualify for the EIC without a qualifying child if you are at least age 25 but under age 65 and your earned income is less than $17,640 ($24,210 if married filing jointly). For more information, refer to Chapter 3.

How Do I Figure the Amount of EIC?

If you can claim the EIC, you have two options for calculating the credit:

1. Have the IRS figure the EIC for you.
2. Figure the EIC yourself using a worksheet provided in the instructions for the form you file.

To learn how to have the IRS figure the EIC for you or to find the appropriate worksheet for self-calculation, refer to Chapter 4.

How Can I Quickly Locate Specific Information?

To quickly locate specific information, you can use the index provided in this publication. The index will direct you to the relevant headings, tables, or worksheets.

Is There Help Online?

Yes, there is online help available for determining your eligibility for the EIC. You can use the EITC Qualification Assistant at IRS.gov/EITC to find out if you may be eligible for the credit. The EITC Qualification Assistant is available in both English and Spanish.

What's New for 2023

There are a few updates for the 2023 tax year regarding the Earned Income Credit:

• Earned income amount: The maximum amount of income you can earn and still qualify for the credit has changed. The specific thresholds depend on the number of qualifying children you have. For more details, refer to Rules 1 and 15.
• Investment income amount: The maximum amount of investment income you can have and still qualify for the credit is $11,000. This is covered in Rule 6.

Reminders

Here are some important reminders regarding the EIC:

• Self-only EIC: If your qualifying child is treated as the qualifying child of another person under the tiebreaker rules, you may still be able to claim the EIC using the rules for taxpayers without a qualifying child. Refer to Chapter 3 for more information.
• Schedule EIC: If you have a qualifying child, make sure to complete and attach Schedule EIC to your Form 1040 or 1040-SR, even if the child doesn't have a valid SSN. For instructions on completing Schedule EIC, including situations where the child doesn't have a valid SSN, see Schedule EIC.
• Increased EIC on certain joint returns: Married individuals filing a joint return may be eligible for a higher EIC compared to individuals with the same income but a different filing status. When using the EIC Table, make sure to use the correct column for your filing status and the number of qualifying children with valid SSNs.
• Separated spouses: If you are married but not filing a joint return, you may still qualify to claim the EIC. Refer to Rule 3 for more information.
• EIC and welfare benefits: Any refund received due to the EIC cannot be counted as income when determining eligibility for federal or state assistance programs. Additionally, the refund cannot be considered a resource for at least 12 months after receipt. Check with your local benefit coordinator for more information.
• Medicaid waiver payments: For information on how Medicaid waiver payments are treated for EIC purposes, refer to the section on Earned Income.
• State EIC: If you can claim the EIC on your federal income tax return, you may also be eligible for a similar credit on your state or local income tax return. Check IRS.gov/EITC for a list of states that offer a state EIC.
• EIC documentation: The IRS may request documents to verify your eligibility for the EIC. Make sure to keep records such as birth certificates and school records. The verification process may delay your refund.
• Spanish version of Pub. 596: If you prefer to read the publication in Spanish, you can access Pub. 596(SP), Crédito por Ingreso del Trabajo, at IRS.gov/Pub596SP.

Rules for Everyone

This section covers the rules that apply to all individuals claiming the EIC.

Rule 1—Adjusted Gross Income (AGI) Limits

Your adjusted gross income (AGI) must be below certain thresholds to qualify for the EIC. The specific limits depend on the number of qualifying children you have and whether you are filing as single, married filing jointly, or head of household. Refer to Table 1 for the AGI limits.

Rule 2—You Must Have a Valid Social Security Number (SSN)

To claim the EIC, you must have a valid social security number (SSN) by the due date of your 2023 return, including extensions. This requirement applies to both you and any qualifying children you are claiming.

Rule 3—If You Are Separated From Your Spouse and Not Filing a Joint Return, You Must Meet Certain Rules

If you are separated from your spouse and not filing a joint return, there are specific rules you must meet to claim the EIC. These rules are outlined in this section.

Rule 4—You Must Be a U.S. Citizen or Resident Alien All Year

To claim the EIC, you must be a U.S. citizen or resident alien for the entire tax year.

Rule 5—You Cannot File Form 2555

If you are filing Form 2555, which relates to foreign earned income, you are not eligible to claim the EIC.

Rule 6—Your Investment Income Must Be $11,000 or Less

To qualify for the EIC, your investment income must be $11,000 or less. Investment income includes items such as interest, dividends, and capital gains.

Rule 7—You Must Have Earned Income

To claim the EIC, you must have earned income. Earned income includes wages, salaries, tips, and self-employment income. Refer to this section for a detailed explanation of what qualifies as earned income.

Rule 8—Your Child Must Meet the Relationship, Age, Residency, and Joint Return Tests

If you have a qualifying child, they must meet certain tests related to their relationship to you, age, residency, and whether they are filing a joint return. These tests are explained in detail in this section.

Rule 9—Your Qualifying Child Cannot Be Used by More Than One Person To Claim the EIC

If you have a qualifying child, they can only be used by one person to claim the EIC. This rule is in place to prevent multiple individuals from claiming the same child for the credit. Tiebreaker rules are provided to determine who can claim the child in case of conflicting claims.

Rule 10—You Cannot Be a Qualifying Child of Another Taxpayer

To claim the EIC, you cannot be a qualifying child of another taxpayer. This rule ensures that individuals who are claimed as dependents by someone else cannot also claim the EIC.

Rules if You Have a Qualifying Child

This section covers the additional rules that apply if you have a qualifying child.

No qualifying child

If you do not have a qualifying child, you must meet certain rules to claim the EIC. These rules are explained in this section.

Rule 8—Your Child Must Meet the Relationship, Age, Residency, and Joint Return Tests

To claim the EIC with a qualifying child, the child must meet specific tests related to their relationship to you, age, residency, and whether they are filing a joint return. These tests are explained in detail in this section.

Rule 9—Your Qualifying Child Cannot Be Used by More Than One Person To Claim the EIC

If you have a qualifying child, they can only be used by one person to claim the EIC. This rule is in place to prevent multiple individuals from claiming the same child for the credit. Tiebreaker rules are provided to determine who can claim the child in case of conflicting claims.

Rule 10—You Cannot Be a Qualifying Child of Another Taxpayer

To claim the EIC, you cannot be a qualifying child of another taxpayer. This rule ensures that individuals who are claimed as dependents by someone else cannot also claim the EIC.

Rules If You Do Not Have a Qualifying Child

This section covers the rules that apply if you do not have a qualifying child.

If you have a qualifying child

If you have a qualifying child, you must meet certain rules to claim the EIC. These rules are explained in this section.

Rule 11—You Must Meet the Age Requirements

To claim the EIC without a qualifying child, you must meet certain age requirements. These requirements are explained in detail in this section.

Rule 12—You Cannot Be the Dependent of Another Person

To claim the EIC without a qualifying child, you cannot be claimed as a dependent by another person. This rule ensures that individuals who are claimed as dependents by someone else cannot also claim the EIC.

Rule 13—You Cannot Be a Qualifying Child of Another Taxpayer

To claim the EIC without a qualifying child, you cannot be a qualifying child of another taxpayer. This rule ensures that individuals who are claimed as dependents by someone else cannot also claim the EIC.

Rule 14—You Must Have Lived in the United States More Than Half of the Year

To claim the EIC without a qualifying child, you must have lived in the United States for more than half of the tax year. This rule ensures that the credit is primarily available to individuals who are U.S. residents.

Figuring and Claiming the EIC

This section provides guidance on how to figure and claim the EIC.

Rule 15—Earned Income Limits

To qualify for the EIC, your earned income must be below certain thresholds. The specific limits depend on the number of qualifying children you have and whether you are filing as single, married filing jointly, or head of household. Refer to Table 1 for the earned income limits.

IRS Will Figure the EIC for You

If you prefer, the IRS can calculate the EIC for you. This section explains how to request the IRS to figure the credit on your behalf.

How To Figure the EIC Yourself

If you choose to calculate the EIC yourself, you can use a worksheet provided in the instructions for the form you are filing. This section provides instructions on how to figure the credit on your own.

Special Instructions—EIC Worksheets

This section provides additional instructions for using the EIC worksheets, including specific scenarios such as net earnings from self-employment and when both spouses have self-employment income.

Schedule EIC

If you have a qualifying child, you must complete and attach Schedule EIC to your Form 1040 or 1040-SR. This section provides information on how to complete Schedule EIC, including situations where the qualifying child does not have a valid SSN.

Disallowance of the EIC

In certain cases, the EIC may be disallowed or reduced. This section explains the disallowance rules and provides information on Form 8862, which may be required to claim the credit.

Detailed Examples

This section provides detailed examples to help you understand how the EIC works in different scenarios. Examples include calculations and step-by-step instructions.

How To Get Tax Help

If you need assistance with your tax return or have questions about the EIC, this section provides information on various resources available to you. These resources include free tax preparation options, online tools, tax help for individuals with disabilities, and contact information for the Taxpayer Advocate Service (TAS) and Low Income Taxpayer Clinics (LITCs).

EIC Table

For reference, an EIC Table is provided in this section. The table is used to determine the amount of EIC based on your filing status, number of qualifying children, and earned income.

Conclusion

This guide has provided an overview of Publication 596, which covers the Earned Income Credit (EIC). The EIC is a valuable tax credit that can reduce your tax liability or result in a refund. By understanding the rules and requirements outlined in this publication, you can determine if you are eligible for the EIC and how to claim it. For more detailed information and specific examples, refer to the relevant sections in this publication. If you need further assistance, consult the available tax help resources mentioned in the guide.