2017 Earned Income Tax Credit EITC

By | October 20, 2016

The IRS is going to announce the 2017 Earned Income Tax Credit soon. Taxpayers who are eligible for the 2017 EITC may receive a substantial benefit. To summarize, the EITC, Earned Income Tax Credit, is a benefit for working people who have low to moderate income. It supplements wages by rewarding people who work.  It reduces the amount of tax you owe and may also give you a refund. This means that the EITC may put money in your pocket at tax time if you qualify for the 2017 Earned Income Tax Ccredit. If you are unfamiliar with this term, the EITC is also called EIC or Earned Income Credit. Different tax preparers or programs may refer to this differently.


When can you claim the 2017 EITC?

You can claim the 2017 earned income tax credit when you file your tax return in 2018. In 2017, you may be able to file for the 2016 Earned Income Tax Credit. The difference between the 2016 EITC and the 2017 EITC is amount. Using a tax software will help ensure that you are filing for the right year of EITC Benefit. When you prepare your tax return, most tax software and tax accountants automatically check to see if you qualify for the Earned Income Tax Credit. If you qualify for the EITC, they will calculate the exact amount of your credit for you. It will also generate the form(s) you need to claim your full credit and fill them out for you.


2017 EITC Income Limits

Some changes to the 2017 Earned Income Tax Credit (EITC) may put more money in your pocket in 2017 if you are married, or if you have three or more qualifying children. The IRS is expected to announce the amount of earned income credit taxpayers may claim in 2017 soon.

To figure out if you are eligible for the 2017 earned income tax credit, you can use the IRS Earned Income Credit Worksheet (EIC Worksheet) in the instruction booklet for Form 1040, Form 1040A, or Form 1040EZ, and the Earned Income Credit (EIC) Table in the instruction booklet, or use the EITC Assistant Tool online. The EITC is designed to encourage and reward work. As noted, a worker’s EITC grows with each additional dollar of earnings until reaching the maximum value.

2017 Earned Income Tax Amounts

The earned income tax credit (2017 EITC) ranges from $510 to $6.318 in benefits for tax filers in 2017. Remember, these are the 2017 EITC numbers. According the the 2017 EITC table, you will get these amounts when you file taxes in 2018.  The instructions for the Form 1040 series provide tables showing the amount of the earned income credit for each type of taxpayer. The 2017 earned income amount is the amount of earned income at or above which the maximum amount of the 2017 earned income credit is allowed.


2017 Earned Income Credit Table

 Number of Qualifying Children for  EITC
One Two Three or More None
2017 Earned Income Amount $10,000 $14,040 $14,040 $6,670
Maximum Amount of Credit $3,400 $5,616 $6,318 $510
Threshold Phaseout Amount $18,340 $18,340 $18,340 $8,340
Completed Phaseout Amount $39,617 $45,007 $48,340 $15,010
Married EITC Threshold $23,930 $23,930 $23,930 $13,930
Completed Phaseout Amount Filing Joint $45,207 $50,597 $53,930 $20,600


The threshold phaseout amounts and the completed phaseout amounts shown in the table below for married taxpayers filing a joint return include the increase as adjusted for inflation for taxable years beginning in 2017. The EITC “threshold phaseout amount” is the amount of adjusted gross income above which the maximum amount of the 2017 earned income tax credit begins to phase out. The EIRC “completed phaseout amount” is the amount of adjusted gross income at or above which no earned income tax credit in 2017 is allowed.


Who can claim 2017 Earned Income Tax Credit (EIC)?

When filing taxes for 2017 (due in April 2018), working families with children that have annual incomes below about $39,000 to $53,300 (depending on marital status and the number of dependent children) may be eligible for the federal EITC. To claim the 2017 EITC on your tax return, you must meet all the following rules:

  • You, your spouse (if you file a joint return), and all others listed on Schedule EIC, must have a Social Security number that is valid for employment
  • You must have earned income from working for someone else or owning or running a farm or business
  • Your filing status cannot be married filing separately
  • You must be a U.S. citizen or resident alien all year (If you are a nonresident alien married to a U.S. citizen or resident alien, see Publication 519, U.S. Tax Guide for Aliens)
  • You cannot be a qualifying child of another person
  • You must meet the earned income, AGI and investment income limits (income limits change each year), see EITC Income Limits for the tax year amounts
  • And you must meet one of the following:
    • Have a qualifying child (see who is a qualifying child below)
    • If you do not have a qualifying child, you must:
      • be age 25 but under 65 at the end of the year,
      • live in the United States for more than half the year, and
      • not qualify as a dependent of another person.


When can you get 2017 Earned Income Credit?

IRS cautioned taxpayers not to count on getting a refund by a certain date, especially when making major purchases or paying other financial obligations. Though IRS issues most refunds in less than 21 days, some returns are held for further review. In addition, starting next year, some people will get their refunds a little later. The Protecting Americans from Tax Hikes (PATH) Act requires IRS to hold the refund for any tax return claiming either the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) until Feb. 15. By law, IRS must hold the entire refund, not just the portion related to the EITC or ACTC.


What Is Earned Income for the Earned Income Tax Credit?

Not all income is earned income. “Earned” income is any money you were paid for doing work, whether you work for yourself or for someone else. The following are examples of earned income:

  • Salaries
  • Wages
  • Tips
  • Commissions
  • Royalties
  • Self-employment net earnings
  • Jury duty pay
  • Union strike benefits
  • Long-term disability benefits received before minimum retirement age
  • Nontaxable combat pay


Same Sex Marriage and the 2017 Earned Income Tax Credit

The U.S. Department of the Treasury and the Internal Revenue Service ruled in 2013 that same-sex couples, legally married in jurisdictions that recognize their marriages, will be treated as married for federal tax purposes The ruling applies to all federal tax provisions where marriage is a factor, including filing status, claiming personal and dependency exemptions, taking the standard deduction, employee benefits, contributing to an IRA and claiming the earned income tax credit or child tax credit.

Thus, for claiming a same-sex marriage is important for claiming the EITC.