2018 Earned Income Tax Credit EITC

The 2018 Earned Income Tax Credit has been announced. The maximum earned income tax credit amount for 2018 is $6,444 for taxpayers filing jointly who have three or more qualifying children, up from $6,318 for 2017. These 2018 EITC amounts are different because the IRS adjusts the amounts for inflation each year. Remember that these amounts are for the 2018 tax year,  this means you will file taxes in 2019. This webpage has information on the 2018 earned income credit table.

See this for information on the 2017 earned income tax credit when filing taxes in 2018. Taxpayers may qualify for the EITC even if they didn’t make enough money to require filing a tax return. The EITC is a tax benefit for working people who earn lower or moderate incomes. The credit offsets taxes, supplements very low wages, and encourages work.

 

What is the Earned Income Tax Credit 2018 Amount?

The earned income tax credit or earned income credit (EITC or EIC) is a refundable tax credit for low- to moderate-income working individuals and couples, particularly those with children. The amount of EITC benefit depends on a recipient’s income and number of children. A specific chart below shows how much one can expect for the 2018 earned income tax credit. The average earned income tax credit for 2015 was $2,455, according to the IRS.

Wages, salaries, and even tips are considered taxable earned income. Commissions and bonuses are included as earned income. Union strike benefits and long-term disability benefits paid prior to reaching the minimum age of retirement are also considered earned income.

 

Earned Income Tax Credit 2018 Table (2018 EIC Table)

Below are the amounts of the earned income tax credit 2018 chart. You can see how the 2017 EITC chart amount is different for your filing status and how many children are dependents on a tax return. Below is the 2018 EITC table:

Number of Qualifying Children
One Two Three or More None
Earned Income Amount $10,200 $14,320 $14,320 $6,800
Maximum Amount of Credit $3,468 $5,728 $6,444 $520
Threshold Phaseout Amount (Single, Surviving Spouse, or Head of Household) $18,700 $18,700 $18,700 $8,510
Completed Phaseout Amount (Single, Surviving Spouse, or Head of Household) $40,402 $45,898 $49,298 $15,310
Threshold Phaseout Amount (Married Filing Jointly) $24,400 $24,400 $24,400 $14,200
Completed Phaseout Amount (Married Filing Jointly) $46,102 $51,598 $54,998 $21,000

 

The instructions for the Form 1040 series provide tables showing the 2018 amount of the earned income credit for each type of taxpayer.

For taxable years beginning in 2018, the earned income tax credit is not allowed under if the aggregate amount of certain investment income exceeds $3,500. You can still qualify for the EIC as long as you have earned income and meet all the other IRS EIC qualifications. Bbeing unemployed, not working, and/or not meeting the filing threshhold doesn’t automatically disqualify you from the EIC. You must file a return and meet the EIC requirements to get the tax credit.

Tax credits such as the 2018 Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) deliver critical work supports for employees earning low to moderate wages. Another important tax credit is the Child Tax Credit that is often claimed together with the EITC. The Child Tax Credit is worth up to $1,000 per qualifying child. The Additional Child Tax Credit Earnings Threshold is $3,000.

 

When do you get the EITC in 2018?

If you claim the earned income tax credit (EITC) or the additional child tax credit (ACTC) on your tax return, the IRS must hold your refund until at least February 15 — even the portion not associated with EITC or ACTC.

After you file your return, the best way to track your refund is Where’s My Refund? or the IRS2Go mobile app.

Tax returns are increasingly receiving more audits. This can delay the earned income tax checks from arriving in a taxpayers mail. There are many possible 2018 EITC errors:

  • A missing or incorrect Social Security number for exemptions, dependents or credits
  • The age of child is not consistent with the credit requirements
  • A missing schedule or form
  • An addition, subtraction, multiplication or division error on your return
  • An incorrect information from a tax table, worksheet, schedule or form

 

What Child Qualifies for EITC?

To use the 2018 EIC table, you must understand what a qualifying child is. Below is what counts as a qualifying child on the EITC 2018 tables:

  • Son, daughter, grandchild, stepchild or adopted child
  • Younger sibling, step-sibling, half-sibling, or their descendent
  • Foster child placed with the worker by a government agency

Must live with the worker in the U.S. for more than half the year.  Under 19, under 24 if a full-time student, or any age if totally and permanently disabled.

 

How to get Advance EIC Payments?

  1. You (and your spouse, if filing a joint return) have a valid social security number issued by the Social Security Administration.
  2. You expect to have at least one qualifying child and to be able to claim the credit using that child. If you do not expect to have a qualifying child, you may still be eligible for the EIC, but you cannot receive advance EIC payments.
  3. You expect that your 2010 earned income and adjusted gross income (AGI) will each be less than $40,402 ($46,102 if you expect to file a joint return for 2018). Include your spouse’s income if you plan to file a joint return…
  4. You expect to be able to claim the EIC for 2018.

 

President Trump and the Earned Income Tax Credit in 2018

If the Trump administration’s America First budget plan for 2018 ever gets approved as proposed, anyone claiming the Earned Income Tax Credit (EITC) or the Child Tax Credit (CTC) would face a new requirement: They must have a Social Security number and be legally authorized to work in the U.S.

There has also been some talk of President Trump increasing the Earned Income Tax Credit. There are many studies that show the EIC is very effective in fighting poverty. For example, a single mother working full time, year-round at the federal minimum wage, with two children, would receive an additional $560 if there is a 10% in the earned income tax credit.  If the EITC is increased, this could take effect in 2018.

State Earned Income Tax Credits

Many states (27, and the District of Columbia) have, in fact, already added state-level EITC credits on top of the federal credit. Taxpayers who are eligible can claim the earned income tax credit on their federal tax return and also claim the earned income tax credit on their state tax returns in 2018. Each state has their own 2018 EIC chart that taxpayers must use to calculate their 2018 EIC benefit.