What is the Earned Income Tax Credit (EITC) and Do You Qualify?


Workers may get a larger tax refund this year because of the Earned Income Tax Credit (EITC). But to get it, you must file a tax return and claim it.

Today, January 26, 2023, marks the 18th anniversary of Awareness Day, a nationwide effort to increase awareness about the EITC and other refundable credits. This year, IRS is promoting EITC and providing information on other refundable tax credits that you may be eligible for. This includes the Child Tax Credit (CTC) and Additional Child Tax Credit (ACTC), the Credit for Other Dependents (ODC) and/or the American Opportunity Tax Credit (AOTC).

In 2023, 34,000 Vermonters claimed the EITC. The average EITC amount was $1,957, for a total of $66,000,000 claimed with the earned income tax credit.

If you worked last year and your income is less than $63,698, check out your eligibility for EITC. EITC can mean up to a $7,430 refund when you file a return and have qualifying children. Workers with no qualifying children could be eligible for a smaller credit, up to $600 dollars. According to the Internal Revenue Service, the average EITC credited for 2022 was $2,541.

Why is it important to have an EITC Awareness Day each year? One-third of the EITC population changes each year. The IRS estimates only four out of five workers claim the EITC they earned. This leaves billions of dollars on the table each year. We want to get the word out to those who are eligible to file a tax return even if they don’t owe any tax to claim the EITC. Its money workers can use for groceries, rent, utilities and other bills.

EITC is complex. It varies by income, family size and your filing status. To be eligible, you must have earned income or certain disability income. This means you must have income from working for someone or working for yourself. 

Find out if you are eligible by visiting www.irs.gov/eitc.

Also, if you make less than $64,000, you may qualify for free tax return preparation through volunteer sites. IRS-certified volunteers prepare your tax return and find out if you qualify for EITC and other refundable credits. Find a location for free tax return preparation near you at irs.gov; search VITA or locate a volunteer site by calling or visiting 211

Make sure you get the right amount of credit due you. If you have someone prepare your return, bring the following to your preparer:

  • A valid driver's license or other photo ID card
  • Social security cards, a social security number verification letter for all persons listed on the return
  • Birth dates for all persons listed on return
  • All income statements: Forms W-2 and 1099, Social Security, unemployment, and other statements, such as pensions, stocks, interest and any documents showing taxes withheld. If you run a business or farm, records of all income earned.
  • All records of expenses, such as tuition, mortgage interest or real estate taxes. And, if you run a business or farm, records of all related expenses.
  • Copies of last year's state and federal tax returns, if available
  • Bank routing numbers and account numbers to direct deposit any refund
  • Dependent childcare information: name and address of who you paid and either the caretaker's SSN or other tax identification number
  • If you purchased coverage through the Health Insurance MarketplaceForm 1095-APDF
  • Both spouses to sign forms to e-file (electronically file) a joint tax return