Tax Credits and Tools

Tax credits can help you save money and build assets. A few important credits include:

  • The Child Tax Credit (CTC)
  • The Credit for the Elderly or Disabled, and
  • The Earned Income Tax Credit (EITC).

To get any of these tax credits, you must file your taxes!

Get free help filing your taxes

If you have limited income, don't pay someone to do your taxes. If you made $54,000 or less last year, you can use a Volunteer Income Tax Assistance (VITA) center to file. With VITA, certified volunteers help prepare your taxes and make sure you get any credits you qualify for. Most sites also offer free electronic filing (e-filing).

VITA sites are often at community centers, libraries, schools, shopping malls, and other convenient locations. Find a local VITA center or call 1-800-906-9887.

If you prefer to file your own taxes online, you can do that for free if you made less than $66,000 last year. Learn more about the IRS Free File program.

Tip: Always keep all your W-2 forms and a record of who you have worked for during the year. Then, file your taxes, even if your income is low enough that you don't have to file — you can only get a tax credit if you file your taxes.

Child Tax Credit (CTC)

The Child Tax Credit (CTC) gives parents with children under age 17 up to a $2,000 tax credit for each child. Eligible families must be working and earning at least $2,500 a year.

Note: If you get Supplemental Security Income (SSI) benefits and get money from a CTC, you should spend it within 12 months. After 12 months, Social Security counts that money toward SSI's resource limit.

Credit for the Elderly or Disabled

If you or your spouse got taxable disability income and was permanently and totally disabled during the tax year, you may be eligible for the Credit for the Elderly or the Disabled.

Earned Income Tax Credit (EITC)

If you have low income, the Earned Income Tax Credit (EITC) may help lower your federal income taxes. Even if you don’t earn enough money to owe federal income taxes, you may be able to get this tax credit. Many people who qualify for an EITC don’t get it, because they don’t know they could or they don't file their taxes.

To qualify, you must have income from employment, self-employment, or employer-paid disability benefits that is below certain limits and you must file your taxes.

The amount you get from your EITC depends on your Adjusted Gross Income (AGI), whether you are married, and the number of children you have. For 2018 (filing taxes by April 2019), the EITC ranges from $519 to $6,431.

EITC Adjusted Gross Income (AGI) Limits and Maximum Credits*

No Children

One Qualifying Child

Two Qualifying Children

Three or More

Qualifying Children

Single

AGI limit: $15,270
Max credit: $519
AGI limit: $40,320
Max credit: $3,461
AGI limit: $45,802
Max credit: $5,716
AGI limit: $49,194
Max credit: $6,431

Married (filing jointly)

AGI limit: $20,950
Max credit: $519
AGI limit: $46,010
Max credit: $3,461
AGI limit: $51,492
Max credit: $5,716
AGI limit: $54,884
Max credit: $6,431
* Figures are for tax year 2018 (filing by April 2019).
How to qualify for the Earned Income Tax Credit (EITC)

General requirements:

  • You must meet adjusted gross income requirements (see table above).
  • You must have earned income from employment, self-employment, or employer-paid disability benefits that you got before retirement.
  • You must have a Social Security number valid for employment.
  • You cannot file your taxes as “married filing separately.” If you are married, you must file a joint tax return.
  • You must be a U.S. citizen or resident alien. If not, you must be married to a U.S. citizen or resident alien and filing a joint tax return.
  • You must live in the U.S. for more than half of the year.

Age requirements:

  • If you are claiming qualifying children, you can be any age.
  • If you’re not claiming a qualifying child, you must be 25 – 64 years of age.

Additional requirements:

  • You cannot claim foreign income or a foreign housing deduction using Form 2555 or 2555EZ.
  • You cannot have more than $3,500 in investment income (for 2018).
  • You cannot be the dependent of another person.
  • You cannot be the qualifying child of another person.

Qualifying Children

A child must meet some requirements to be considered a “qualifying child” for an EITC:

  • Relationship: The child must be your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of these (for example, your grandchild, niece, or nephew).
  • Residence: The child must live at the same residence as you for more than half the year and have a valid Social Security number.
  • Age: At the end of the tax year, the child must be 18 or younger. Or, if going to school full-time, the child must be 23 or younger. The only exception is if your child is permanently and totally disabled, in which case there is no age requirement.

A qualifying child can only be listed on one tax return for an EITC.

How to Get an EITC

To claim an EITC, you must file a federal tax return, IRS Form 1040. If you have a qualifying child, be sure to attach a Schedule EIC.

To calculate the value of your EITC, you can use the Earned Income Credit Worksheet in your 1040 instruction booklet. Or you can ask the IRS to calculate it for you by noting an “EIC” on the Earned Income Credit line on your tax return.

To see whether you qualify for an EITC and how much you might get, use the IRS EITC Assistant.

EITC, SSI, and SSDI

You must have earned income to qualify for an EITC. Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) do not count as earned income. You can, however, get SSI or SSDI benefits and claim an EITC, as long as you also have earned income.

If you're on SSI, spend any money you get from an EITC within 12 months. Otherwise, that money counts toward SSI's resource limit, unless you save the money in an Individual Development Account (IDA), Plan to Achieve Self-Support (PASS), or ABLE Account.