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    Building Your Assets and Wealth

    Tax Credits and Tools

    Tax credits can help you save money and build assets. A few important credits include:

    • The Child Tax Credit (CTC)
    • The Credit for the Elderly or Disabled, and
    • The Earned Income Tax Credit (EITC).

    To get any of these tax credits, you must file your taxes!

    Get free help filing your taxes

    If you have limited income, don't pay someone to do your taxes. If you made $64,000 or less last year, you can use a Volunteer Income Tax Assistance (VITA) center to file. With VITA, certified volunteers help prepare your taxes and make sure you get any credits you qualify for. Most sites also offer free electronic filing (e-filing).

    VITA sites are often at community centers, libraries, schools, shopping malls, and other convenient locations. Find a local VITA center or call 1-800-906-9887.

    If you prefer to file your own taxes online, you can do that for free if you made less than $79,000 last year. Learn more about the IRS Free File program.

    Child Tax Credit (CTC)

    The Child Tax Credit (CTC) gives parents with children under age 17 up to a $2,000 tax credit for each child. Eligible families must be working and earning at least $2,500 a year.

    Note: If you're on Supplemental Security Income (SSI) benefits and get money from a CTC, you should spend it within 12 months. After 12 months, Social Security will count that money toward SSI's resource limit.

    Credit for the Elderly or Disabled

    If you or your spouse is a U.S. citizen who got taxable disability income and was permanently and totally disabled during this tax year, you may be eligible for the Credit for the Elderly or the Disabled.

    Earned Income Tax Credit (EITC)

    If you have low income, the Earned Income Tax Credit (EITC) may help lower your federal income taxes. Even if you don’t earn enough money to owe federal income taxes, you may be able to get this tax credit. Many people who qualify for an EITC don’t get it, because they don’t know they could or they don't file their taxes.

    Eligibility

    To qualify, you must have income from employment, self-employment, or employer-paid disability benefits that is below certain limits and you must file your taxes.

    The amount you get from your EITC depends on your Adjusted Gross Income (AGI), whether you are married, and the number of children you have. For 2024 (filing taxes by April 2025), the EITC ranges from $2 to $7,830.

    EITC Adjusted Gross Income (AGI) Limits and Maximum Credits*

    No Children

    1 Qualifying Child

    2 Qualifying Children

    3 or More Qualifying Children

    Single
    AGI limit: $18,591
    Max credit: $632
    AGI limit: $49,084
    Max credit: $4,213
    AGI limit: $55,768
    Max credit: $6,960
    AGI limit: $59,899
    Max credit: $7,830

    Married (filing jointly)
    AGI limit: $25,511
    Max credit: $632
    AGI limit: $56,004
    Max credit: $4,213
    AGI limit: $62,688
    Max credit: $6,960
    AGI limit: $66,819
    Max credit: $7,830
    * Figures are for tax year 2024 (filing by April 2025).
    Earned Income Tax Credit (EITC) eligibility requirements

    General requirements:

    • You must meet adjusted gross income requirements (see table above).
    • You must have earned income from employment, self-employment, or employer-paid disability benefits that you got before retirement.
    • You must have a Social Security number valid for employment.
    • You cannot file your taxes as “married filing separately.” If you are married, you must file a joint tax return.
    • You must be a U.S. citizen or resident alien. If not, you must be married to a U.S. citizen or resident alien and filing a joint tax return.
    • You must live in the U.S. for more than half of the year.

    Age requirements:

    • If you are claiming qualifying children, you can be any age.
    • If you’re not claiming a qualifying child, you must be 25 to 64 years old.

    Additional requirements:

    • You cannot claim foreign income or a foreign housing deduction using Form 2555.
    • You cannot have more than $11,600 in investment income (for 2024).
    • You cannot be the dependent of another person.
    • You cannot be the qualifying child of another person.

    Earned Income

    To qualify for an EITC, you or your spouse must have earned income, such as wages, salaries, tips, net earnings from self-employment, or any other form of taxable pay. You can also include nontaxable combat pay as earned income.

    For the EITC, employer-paid disability payments that you get before retirement count as earned income. Benefits from a policy you paid the premiums for or that you got after retirement do not count as earned income.

    Other things that do not qualify as earned income for the EITC include:

    • Interest and dividends
    • Social Security and railroad retirement benefits
    • Pensions and annuities
    • Alimony and child support
    • Workers’ compensation benefits
    • Unemployment compensation
    • Welfare benefits
    • Veterans benefits

    Adjusted Gross Income (AGI)

    Your adjusted gross income must be below certain levels to qualify for an EITC. Adjusted gross income includes all earned income before deductions for taxes, health care, or other expenses, minus certain business, education-related, and other expenses. While filling out your annual tax return (IRS Form 1040), you will be asked a series of questions that will help you figure out what your adjusted gross income is.

    Qualifying Children

    A child must meet some requirements to be considered a “qualifying child” for an EITC:

    • Relationship: The child must be your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of these (for example, your grandchild, niece, or nephew).
    • Residence: The child must live at the same residence as you for more than half the year and have a valid Social Security number.
    • Age: At the end of the tax year, the child must be 18 or younger. Or, if going to school full-time, the child must be 23 or younger. The only exception is if your child is permanently and totally disabled, in which case there is no age requirement.

    A qualifying child can only be listed on one tax return for an EITC.

    How to Get an EITC

    To claim an EITC, you must file a federal tax return, IRS Form 1040. If you have a qualifying child, be sure to attach a Schedule EIC.

    To calculate the value of your EITC, you can use the Earned Income Credit Worksheet in your 1040 instruction booklet. Or you can ask the IRS to calculate it for you by noting an “EIC” on the Earned Income Credit line on your tax return.

    To see whether you qualify for an EITC and how much you might get, use the IRS EITC Assistant.

    Tax Preparation Tips for Claiming the EITC

    Keep all your W-2 forms and keep a record of who you have worked for during the year. Then, file your taxes, even if your income is low enough that you don't have to file — you can only get a tax credit if you file your taxes. Many families with children who qualify for an EITC also qualify for a Child Tax Credit (CTC).

    EITC, SSI, and SSDI

    You must have earned income to qualify for an EITC. Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) do not count as earned income. You can, however, be on SSI or SSDI and claim an EITC, as long as you also have earned income.

    If you're on SSI, spend any money you get from an EITC within 12 months. Otherwise, that money will count toward SSI's resource limit, unless you save the money in an Individual Development Account (IDA) or Plan to Achieve Self-Support (PASS).

    Learn more

    What Benefits Do I Get?

    See how to find out which Social Security and state benefits you get.

    Supplemental Security Income (SSI)

    SSI helps people with disabilities and seniors who have low income and resources.

    Social Security Disability Insurance (SSDI)

    SSDI helps people with disabilities who worked and paid Social Security taxes.