What’s the “earned income” part of the Earned Income Tax Credit?

You can be owed money even if you’re self-employed, earned tips, or have these other circumstances

We get it. Taxes are complicated, even if you only have a simple W-2. It’s even harder to navigate tax season when your work circumstances are more unique. While you’re filling out your forms, however, keep in mind that you could be owed the Earned Income Tax Credit (EITC).

The EITC was created to put money back into the pockets of hardworking people. However, one in five people who qualify haven’t claimed it – that’s more than 45,000 people in Connecticut. It’s money you’ve earned, but you have to claim it in order to get it. If you don’t, you could be leaving thousands of dollars on the table. 

How do you know if you qualify? Our quiz can tell you if you could be eligible. We understand that everyone’s work situation is different, and that can make navigating taxes harder. However, you can still qualify if you are a freelancer, a server, or have another employment circumstance.

The Earned Income Tax Credit is for people who make less than around $64,000, and who have “earned income” in the year. What is “earned income,” for the Earned Income Tax Credit?

You may qualify for the EITC if:

You’re self employed. Being your own boss doesn’t mean you have to miss out on the EITC. You may still qualify if you own your own business or work freelance.

You earn tips. You’ve worked hard to earn tips. You’ve earned them, and they count toward the EITC if federal income taxes are withheld on Form W-2, box 1.

You do gig work. The money you earn by driving for a rideshare service, delivering food, and running errands counts toward the EITC if your employer didn’t withhold tax.

You’ve made money from investments. Connecticut’s version of the EITC allows you to qualify if you earn less than $11,600 from investments.

You were on strike. Fighting for better work conditions and pay doesn’t mean you miss out on the EITC. You can still qualify as long as you received benefits from a union strike.

You own a farm. Even if the real boss has spots and says “moo,” the income you make from your farm counts toward the EITC.

You’re a member of the clergy. Some special rules apply if you’re a minister or a member of the clergy. Your earned income includes the money you make as a member of the clergy, along with the rental value of the home you live in. More in-depth information is available from the IRS.

You’re in the military and stationed outside of the U.S. No matter what country you’re in, the government considers the U.S. your main home for tax purposes. The rules are a little complicated, so check information from the IRS for more details.

You’re not a U.S. citizen. There are two requirements for filing for the EITC if you’re not a U.S. citizen. You must have lived in the U.S. for at least six months of the year that you’re filing for, and you must have a Social Security Number. You can qualify if your spouse matches those requirements, even if you don’t. With current threats from the federal government toward immigrants and people who are not citizens, we realize this could be complicated. SimplifyCT is a safe resource that can discreetly help if you are in this situation.

It’s important to note that you don’t need children or dependents to receive the money you’re owed through the EITC. You also can qualify even if you don’t make enough money to be required to file taxes, and receiving it won’t affect your other benefits like SNAP, WIC, TANF, HUSKY, Medicaid, or CHIP.

Don’t miss out on money you can use to navigate the rising cost of groceries, utilities, child care, and rent. Filing is free at government-certified, no-commitment Volunteer Income Tax Assistance (VITA) sites, like SimplifyCT.

Take the quiz to see if you could qualify.