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WalletPrep worksheet · Taxes

Do you qualify for the Earned Income Tax Credit?

Name ____________________ Date __________

Key ideas

  1. You need earned income from work. Wages, tips and self-employment earnings count. Unemployment, Social Security, child support and interest don't.
  2. More children means a bigger maximum. Up to $4,427 with one child, $7,316 with two and $8,231 with three or more in 2026.
  3. You must file a return to get it. File Form 1040, plus Schedule EIC if you claim a child, even if your income is below the filing requirement.

Vocabulary

Earned Income Tax Credit
A refundable federal tax credit for workers with low to moderate earned income, larger for families with children.
Refundable tax credit
A tax credit that is paid to you as a refund when it is bigger than the tax you owe.
Dividend
A payment a company makes to its shareholders out of its profits, usually in cash and often every 3 months.
Adjusted gross income
Your total income for the year minus a short list of adjustments, like deductible IRA contributions and student loan interest. Many tax rules and programs use it.
Qualifying child
A child who passes the IRS tests for relationship, age, residency and support, so you can claim tax benefits for them.
Unemployment insurance
A state program that pays part of your old wages for a limited time after you lose a job through no fault of your own.

Work it out

Tanya is a single mom with a 6-year-old who lives with her all year. She files as head of household and earns $22,000 as a home health aide.

  1. Wages
  2. Federal income tax owed
  3. EITC, one child
  4. Refundable child tax credit
  5. Credits paid as refund

Check yourself

  1. Which of these counts as earned income for the EITC?

    • A. Unemployment benefits
    • B. Child support
    • C. Tips from a restaurant job
    • D. Interest from a savings account

  2. You owe $500 in federal income tax and qualify for a $2,000 EITC. What happens?

    • A. You get a $1,500 refund from the credit
    • B. You owe $500
    • C. You get $2,500 back
    • D. The credit is lost because you owe tax

  3. You are 23, single, work full time and have no children. Can you claim the EITC?

    • A. Yes, if you earn under the limit
    • B. No, you must be at least 25 without a qualifying child
    • C. Yes, but only half of it
    • D. Only if you are a student

Your turn

Open the IRS EITC Qualification Assistant and answer its questions using last year's income. If you qualified and didn't claim it in any of the last three years, book a free VITA appointment to file for those years.

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Answer key

Do you qualify for the Earned Income Tax Credit?

Work it out

  1. Wages$22,000
  2. Federal income tax owed$0
  3. EITC, one child$4,427
  4. Refundable child tax credit$1,700
  5. Credits paid as refund= $6,127
  1. Her head of household standard deduction of $24,150 is more than her $22,000 of pay, so she owes $0 income tax.
  2. $22,000 is above $13,020, where the one-child EITC reaches its maximum, and below $23,890, where it starts to shrink. She gets the full $4,427.
  3. Her refundable child tax credit is 15% × ($22,000 − $2,500) = $2,925, capped at $1,700. Together: $4,427 + $1,700 = $6,127, plus any tax withheld.

Check yourself

  1. C. Tips from a restaurant job Tips are pay for work, so they count in full. Unemployment, child support and interest are not earned income.
  2. A. You get a $1,500 refund from the credit The EITC wipes out the $500 of tax, and because it's refundable, $2,000 − $500 = $1,500 is paid to you.
  3. B. No, you must be at least 25 without a qualifying child Without a qualifying child, you must be at least 25 and under 65 at the end of the year.