National Taxpayer Advocate Celebrates the 50th Anniversary of the Earned Income Tax Credit

Celebrating 50 Years of the Earned Income Tax Credit

Tax year (TY) 2025 marks the 50th anniversary of the Earned Income Tax Credit (EITC). The Tax Reduction Act of 1975 introduced the EITC as a modest tax break to provide financial help to economically challenged working families. Over the years, the EITC has grown into the federal government’s largest refundable tax credit program for low to moderate-income workers.

What Is the Earned Income Tax Credit

The EITC is a tax credit for people who work and whose earned income is within a certain range. Earned income includes the taxable income and wages earned from working. There are eligibility rules, including filing a tax return, having income within a certain range, and using the proper filing status. The amount of the credit depends on income, filing status, and number of qualifying children, if any.

The amount of income varies by filing status and is adjusted annually. For example, taxpayers who file a joint tax return and earned less than $66,819 in TY 2024 may qualify for the EITC if they have three or more qualifying children. In TY 2025, the threshold for these joint filers increases to $68,675. For single filers, those filing as head of household, or married filing separately, the TY 2024 threshold is $59,899, increasing to $61,555 in TY 2025 if they have three or more qualifying children. The income thresholds are lower for taxpayers with fewer or no qualifying children.

The maximum credit for TY 2025 is $649 if the taxpayer has no qualifying children, $4,328 with one qualifying child, $7,152 with two qualifying children, and $8,046 with three or more qualifying children.

There are additional requirements to qualify for the EITC, including having a valid social security number for any filers or dependents, being a U.S. citizen or resident alien, and using certain filing statuses. As TAS and other stakeholders have discussed, the rules to qualify are complex and taxpayers may want to use the IRS’s EITC Assistant to help determine if they qualify for the credit prior to filing their tax return.

Choosing a Preparer to Assist with the EITC

Taxpayers who wish to claim the EITC with the assistance of a tax preparer should choose their preparer carefully and consider using a credentialed return preparer. Credentialed preparers are subject to regulations governing practice before the IRS. For example, credentialed preparers must exercise due diligence to accurately prepare tax returns and are required to possess the appropriate level of knowledge and skill to perform tax return preparation services. Conversely, non-credentialed return preparers are not subject to the regulations governing credentialed return preparers, but they must still have a valid 2024 preparer tax identification number (PTIN) to receive compensation for preparing, or assisting in the preparation of, a return. A PTIN is a number issued by the IRS to paid federal tax return preparers.

A reputable preparer will always sign their name and include their PTIN when preparing a tax return. The IRS maintains a searchable directory of paid tax return preparers with credentials recognized by IRS.

The IRS May Request Additional Information Before Issuing an EITC Refund

When the IRS requests additional information prior to paying an EITC claim, it is often because IRS records show that a child claimed by the taxpayer does not meet the complex age, relationship, or residency tests to be considered a qualifying child under the statute. Another common reason is because the income shown on the return is inconsistent with IRS records or does not meet the statutory income requirements. The IRS notifies a taxpayer that they need to further support their EITC claim by sending a notice, such as Notice CP 75 or CP75A. It is important that taxpayers promptly provide the additional information requested; otherwise, the IRS will continue to hold the refund.

NTA Continues to Advocate for EITC Simplification

While the EITC is an important and powerful antipoverty program, the complexity of the EITC’s requirements often act as a barrier to taxpayers claiming, understanding, and receiving the credit. For example, despite lifting millions of American families out of poverty, roughly 20 percent of likely eligible taxpayers do not claim this credit, leaving behind roughly $6 billion of unclaimed financial assistance in 2020.

In addition to providing taxpayers with information and assistance to help them receive the EITC, I have advocated for administrative and statutory changes to make it easier for taxpayers to understand and claim the EITC. My 2025 Purple Book of Legislative Recommendations urges Congress to consider statutory changes to simplify the EITC. I have also highlighted ways that the IRS should modify program administration to treat taxpayers fairly when they claim the EITC in error.

Conclusion

The 50th anniversary of the EITC is an exciting opportunity to celebrate a program of tremendous importance to low- and middle-income taxpayers. Despite the EITC’s significance as an antipoverty program, the credit has proven complex and burdensome to claim for many taxpayers who qualify. As we celebrate 50 years of the EITC program, Congress and the IRS should also consider how to simplify program administration so the EITC can benefit every taxpayer who qualifies.