The maximum refund available through the Earned Income Tax Credit (EITC) is increasing for tax years 2025 and 2026. For those filing their 2025 tax returns, the maximum possible refund is $8,046, an increase from the $7,830 maximum in the prior year.
The Internal Revenue Service (IRS) further announced that for tax year 2026, the maximum EITC will increase to $8,231. The EITC is a tax credit designed for low-to-moderate-income workers, with the highest credit amounts generally going to those with children. The IRS notes that approximately 20% of eligible taxpayers fail to claim this valuable credit.
The EITC amount a taxpayer receives is determined by their income and the number of qualifying children they have. For the 2025 tax year, single filers with no qualifying children and an annual income up to $19,104, or married couples filing jointly with income up to $26,214, can receive a maximum credit of $649.
Single filers with one qualifying child and an annual income up to $50,434, or married couples filing jointly with income up to $57,554, can receive a maximum credit of $4,328. Single filers with two qualifying children and an annual income up to $57,310, or married couples filing jointly with income up to $64,430, can receive a maximum credit of $7,152.
Single filers with three or more qualifying children and an annual income up to $61,555, or married couples filing jointly with income up to $68,675, can receive the highest maximum credit of $8,046.
The Earned Income Tax Credit is a refundable credit. If the taxpayer owes taxes to the IRS, the credit is first used to reduce the amount of tax due. If the credit amount exceeds the tax owed, or if the taxpayer owes no tax, the entire remaining amount is returned to the taxpayer as a refund.
According to the IRS, Earned income includes all the taxable income and wages you get from working for someone else, yourself, or from a business or farm you own. Types of earned income are wages, salary, or tips where federal income taxes are withheld on Form W-2, box 1; income from a job where your employer didn’t withhold tax (such as gig economy work) including driving a car for booked rides or deliveries, running errands or doing tasks, selling goods online, providing creative or professional services, or providing other temporary, on-demand, or freelance work.
Earned income also includes money made from self-employment, including if you own or operate a business or farm, are a minister or member of a religious order, are a statutory employee and have income, benefits from a union strike, certain disability benefits you got before you were the minimum retirement age, and Nontaxable Combat Pay (Form W-2, box 12 with code Q). If you claim nontaxable combat pay as earned income, it may increase or decrease the amount of your EITC.
Earned income does not include pay you got for work when you were an inmate in a penal institution, interest and dividends, pensions or annuities, Social Security, unemployment benefits, alimony, or child support.
If you qualify for the EITC, you may also qualify for other tax credits including the Child Tax Credit and the Credit for Other Dependents, the Child and Dependent Care Credit, and Education Credits, according to the IRS.
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Kishor Panthi
View More PostsKishor Panthi is the founder and editor-in-chief of Khasokhas and NepYork. He is the author of three books, “Kampan,” "UNTRANSLATABLE" and “Zero Mile.” He writes about social issues, immigration, and politics.
