2026-2027 Earned Income Tax Credit (EITC) Income Limits and Qualification Rules

The Earned Income Tax Credit (EITC) is the largest refundable federal tax credit for working families and individuals. For tax year 2026, the income you’ll report on the return you file in early 2027, the maximum credit is $8,231 for families with three or more qualifying children.

All of the 2026 figures below come from IRS Revenue Procedure 2025-32, which sets the annual inflation adjustments for 2026. The 2027 figures come from the IRS’s 2027 inflation adjustments, released November 5, 2026.

2026 EITC Maximum Credit Amounts

To get the maximum, your earned income has to reach $18,290 with two or more children, $13,020 with one child, or $8,680 with no children. Below that, the credit is still there, just smaller.

2026 EITC Income Limits

Your earned income and your AGI must both fall below these limits to qualify. The investment income limit is a separate test.

The credit starts shrinking once income passes $23,890 for most filers with children ($31,160 for married couples filing jointly), or $10,860 with no children ($18,140 for joint filers). At the limits in the table, it reaches zero.

Investment income limit for 2026: you can’t claim the EITC if your investment income is more than $12,200, up from $11,950 for 2025.

2027 EITC Amounts and Income Limits

The IRS set the 2027 EITC figures on November 5, 2026. These apply to the income you earn in 2027 and report on the return you file in early 2028.

The 2027 investment income limit is $12,600. To get the full 2027 credit, you need earned income of at least $18,880 with two or more children, $13,450 with one or $8,960 with none. For the rest of the 2027 numbers, including the new standard deduction, see my 2027 and 2026 federal tax brackets.

How the EITC Works: Phase-In and Phase-Out

The EITC doesn’t just shut off at the income limit. It phases in as you earn more, holds at its maximum for a while, then phases out as income rises further:

• Phase-in: as earned income rises from $0, the credit grows until it reaches its maximum.
• Plateau: the maximum stays flat across a range of income.
• Phase-out: above the plateau, the credit shrinks until it hits $0.

That means the credit is highest for workers in the middle range, earning enough for the full credit but not so much that it starts phasing out.

Example: EITC in Action for 2026

Maria, single with two qualifying children, earns $28,000 in wages in 2026. She’s just past the plateau, which ends at $23,890, so her credit is a little under the $7,316 maximum: about $6,450. Even if she owes no federal income tax, she gets the credit as a refund. That’s the “refundable” part.

James and Linda, married with one qualifying child, have $52,000 of combined AGI in 2026. They’re deep in the phase-out zone for one child (the limit is $58,863), so their credit drops to about $1,100, well below the $4,427 maximum. They still qualify, and it’s still money in their refund.

If you’re expecting the EITC on your 2026 return, keep in mind that the IRS holds EITC refunds until mid-February by law. My guide to when you can file your taxes has the expected opening day and refund timing.

State EITCs: Up to 100% More on Top of the Federal Credit

Here’s the part a lot of people miss: 32 states and Washington, DC pay their own EITC on top of the federal one. Most simply take a percentage of your federal credit, so once you know your federal EITC, the state amount is quick math.

The match ranges from about 4% in Wisconsin (one child) to 100% in DC for 2025. South Carolina still figures its credit at 125% of the federal amount, but starting in 2026 it caps the credit at $200 a year. California, Minnesota and Washington use their own formulas, and Washington pays a flat amount by family size.

Worked example: Maria’s $6,450 federal EITC from above would add about $1,290 in Illinois (20%), $1,613 in Colorado (25%), $2,580 in New Jersey (40%) and $2,903 in Maryland (45%). In South Carolina she’d get $200, and since that credit is nonrefundable, only if she owes at least that much state tax.

“Refundable” means you get the credit even if it’s more than the state tax you owe. With a nonrefundable credit, it can only cut your state tax to zero.

Sources: the Tax Policy Center’s state EITC rate table (as of January 2026, updated July 2026), plus each changed state’s revenue department. You claim a state EITC on your state return, usually with your federal EITC amount from Schedule EIC, so check your state tax refund timing too.

What changed for 2026 and 2027:

• Colorado cut its credit from 50% to 25% of the federal EITC for tax year 2026, per the Colorado Department of Revenue.
• Montana doubled its credit to 20%, and Oregon raised its rates to 14% (17% with a child under 3).
• South Carolina kept its 125% formula but capped the credit at $200 a year starting with 2026 returns, under Act 110 of 2026.
• DC paid 100% for 2025 after a 2025 law moved the full match up from 2029. Congress overturned the follow-up law in February 2026, and DC disputes the vote, so 2026 may fall back to the older 85% rate. DC’s tax office hasn’t posted its 2026 rate yet.
• Connecticut stays at 40% plus the $250 child bonus, and Rhode Island stays at 16%. Bills to raise Rhode Island’s credit to 30% for 2027 were introduced in 2026, but I found no sign they passed.
• North Carolina still has no state EITC. Its credit expired in 2014, and the 2026 bills to bring it back haven’t become law.

Basic Qualifying Rules

You must meet all of the following:

• Earned income: you need wages, salaries, tips, union strike benefits, combat pay or net self-employment income. Alimony, child support, Social Security, pension income and investment income don’t count as earned income.
• Income limits: both your earned income and your AGI must be below the limit for your filing status and number of children (see the tables above).
• Filing status: married filing separately generally can’t claim it, unless you’re separated and meet the special rules: your child lived with you more than half the year, and you either lived apart from your spouse for the last six months of the year or have a separation agreement.
• No qualifying child: you must be between 25 and 64 years old at the end of the tax year, and you can’t be someone else’s qualifying child.
• Qualifying child rules: a qualifying child must be younger than 19 (or under 24 if a full-time student, or any age if permanently and totally disabled), must live with you in the U.S. for more than half the year, and must be related to you (child, stepchild, foster child, sibling or a descendant of one).
• SSN requirement: you, your spouse (if filing jointly) and any qualifying child must all have valid Social Security numbers. A child with an ITIN doesn’t qualify.
• Foreign income: if you exclude foreign earned income on Form 2555, you can’t claim the EITC.

Military and Combat Pay

Members of the military have an election: you can choose to include nontaxable combat pay in your earned income for EITC purposes. Whether this helps depends on your total income, so run the numbers both ways. Tax software typically does this automatically.

Common Issues to Watch Out For

1. Not checking the investment income limit separately. Even if your wages are under the limit, investment income above $12,200 for 2026 disqualifies you entirely. A single stock sale or large dividend distribution can wipe out the EITC. I see this catch people off guard every filing season.

2. Missing the credit when you’re self-employed. Self-employment income counts as earned income for the EITC. But you must report it on Schedule C. Any income you earned in cash and didn’t report doesn’t count and could trigger an audit.

3. Custody disputes and who claims the child. Only one parent can claim a qualifying child per year. If parents are divorced or separated, the child typically qualifies with the custodial parent (the one the child lived with more).

The non-custodial parent can claim the child tax credit with a Form 8332, but can’t claim the EITC that way. The EITC requires the child to actually live with you.

4. Claiming a child who doesn’t qualify by age. If your “child” is 20 and not a full-time student, they don’t qualify for the EITC, even if they still live at home.

5. Not going back for a missed credit. If you were eligible for the EITC in a prior year but didn’t claim it, you have 3 years from the original due date to file an amended return on Form 1040-X. Don’t leave money on the table.

6. Skipping your state credit. If you live in one of the 32 states or DC with its own EITC, claim it on your state return. Tax software usually fills it in, but check that it did.

Historical EITC Credit Comparison

The credit has grown steadily over the years, driven by inflation adjustments.

Looking Ahead: 2028 EITC

The IRS will set the 2028 EITC amounts in fall 2027, using inflation for the 12 months ending August 2027. I’ll add them here when they’re out, along with any state changes from the 2027 legislative sessions. Several states, including Rhode Island and North Carolina, had bills in 2026 to expand or bring back their credits.

If you’re a lower-income worker saving for retirement, the Saver’s Tax Credit income limits are worth a look too. It’s another credit that a lot of EITC-eligible families qualify for and never claim.