Celebrating 50 Years of the Earned Income Tax Credit

The Earned Income Tax Credit (EITC) reached a major milestone in tax year 2025. To help encourage participation, the Internal Revenue Service (IRS) will work to increase awareness of the credit and the significant role it plays in strengthening our working families.

The Tax Reduction Act of 1975 introduced EITC as a modest tax break to provide financial help to economically challenged families and encourage work. Over the years, EITC has grown into the federal government’s largest refundable tax credit program for low- to moderate-income workers.

Even at 50, there is more work to do to raise awareness. The IRS urges community partners to engage with clients directly through all available channels and help make eligible taxpayers aware of this potentially life-changing tax credit.

IRS’s goal is to capture the attention of those who are eligible for EITC and encourage them to find out whether they also qualify for other refundable tax credits. To qualify for the EITC or EIC you must meet certain requirements and file a tax return, even if you do not owe any tax or are not required to file.

The credit is a financial boost to the taxpayer, their family, and community. For example:

• Nationally, as of November 2024, approximately 23 million workers and families received about $63 billion in EITC.
• In Rhode Island during 2024 processing year (2023 tax year) about 68,000 eligible workers and families received about $170 million in EITC.
• The average amount of EITC received nationwide was about $2,748. In Rhode Island, this was $2,513.
• For tax year 2024, the EITC is as much as $7,830 for a family with three or more children and up to $632 for taxpayers who do not have a qualifying child.

Furthermore, workers move in and out of eligibility based on changes in marital, parental, and financial status. Therefore, millions of workers may qualify for the EITC for the first time this year, making year-round outreach and education efforts critical for raising taxpayer awareness. For that reason, IRS conducts outreach and education related to EITC year-round, either directly through the IRS or through leveraged partnerships.

Closing EITC Participation Gap

Approximately four out of five eligible taxpayers receive the EITC. This means millions of taxpayers are putting EITC dollars to work for them. Unfortunately, this also means that many other taxpayers are not taking advantage of a benefit they have earned. Ultimately, our goal is to positively affect the EITC participation rate. The current rate is 81 percent. To reach the roughly 20 percent of eligible taxpayers that do not claim EITC, IRS will continue to focus on underserved communities or taxpayers with unconventional family conditions.

Workers at risk of overlooking the EITC are people:  

• Living in non-traditional homes, such as a grandparent raising a grandchild
• Living in rural areas
• With changed marital or parental status
• Veterans
• With earnings are below filing requirement
• Without children
• Who are Native Americans, have limited English skills, and people with disabilities or raising children with disabilities

You can find a complete list of requirements and income limits on IRS.gov/EITC. Having your tax return prepared for free at a VITA/TCE site can help determine your eligibility for the EITC. They will review your information, such as income, filing status and the number of qualifying children to determine if you are eligible for the Earned Income Tax Credit.

Local VITA site information is available by calling the United Way number 2-1-1.  Also, at IRS.gov - search the word “VITA” and then click on Free Tax Return Preparation for You by Volunteers. To locate the nearest AARP Tax-Aide site, visit aarp.org, or call 888-227-7669.

Meg Chevalier is a Senior Tax Consultant/Relationship Manager in the Providence office of the Internal Revenue Service