The credit is also a major source of IRS errors. TIGTA reported an improper payment rate of 32.7% (about $21.1 billion) for EITC in fiscal year 2025.
This guide covers where the line is, how Schedule EIC fits in, who qualifies, and which mistakes to avoid. It applies to US federal returns, including those filed from Australia by US citizens and residents.
Key Takeaways
- On 2025 returns, enter the credit on line 27a of Form 1040 or 1040-SR.
- Schedule EIC covers qualifying-child details; the childless credit generally needs no schedule.
- Eligibility turns on earned income, AGI, filing status, SSNs and investment income.
- Check the form and instructions for your tax year, because line numbers shift.
Where Is the EIC on Form 1040?
On the 2025 Form 1040, the credit appears on page 2, line 27a, labelled "Earned income credit (EIC)". On Form 1040-SR it is on page 3, with the same line and label. The 2024 form used plain line 27, so always confirm the line against the year you are filing.
EIC and EITC are the same refundable federal credit. Tax software usually says "EITC", while the paper form says "EIC".
What the line does
Line 27a carries the finished credit amount onto your return. You don't enter wages or child details there. Those go elsewhere on the return and on Schedule EIC.
Nearby fields on the 2025 form
- 27b: a checkbox for clergy filing Schedule SE
- 27c: a checkbox if you do not want to claim the EIC
- Line 1i: the nontaxable combat pay election, which can count as earned income for the EIC
- A note beside 27a: write "EIC" there if you want the IRS to calculate the credit for you
Form 8862 is a different matter. It is needed after an earlier EIC disallowance and has nothing to do with the 27b clergy box.
Lines not to confuse with the EIC
| Line (2025) | What it is |
|---|---|
| 19 | Child tax credit or credit for other dependents |
| 28 | Additional child tax credit |
| 29 | American opportunity credit |
| 32 | Total other payments and refundable credits (includes 27a) |
Line 32 is a total, not the EIC alone.
EIC on Form 1040 vs. Schedule EIC
Form 1040 is the main return, and line 27a reports the credit amount. Schedule EIC, "Qualifying Child Information", is a supporting attachment. You attach it when you claim the credit with a qualifying child. It isn't required for the childless credit.
What Schedule EIC asks for
For each child, the schedule asks for:
- Name and Social Security number
- Year of birth
- Relationship to you
- Months the child lived with you in the United States
If more than three children qualify, list only three. Lines 4a and 4b ask about student status and permanent disability for older children.
Schedule EIC does not calculate anything
The calculation lives in the Form 1040 instructions for line 27a, in EIC Worksheets A and B and the EIC Table that follows. Worksheet B applies to certain self-employment, clergy and statutory-employee situations. Everyone else uses Worksheet A.
The filing flow
- Work out whether you qualify and calculate the credit, using the IRS instructions or tax software.
- Enter the result on line 27a of Form 1040.
- Complete and attach Schedule EIC if you have qualifying children.
Who Can Claim the EIC?
Both your earned income and your AGI must fall below the ceiling for your situation. Here are the benchmarks for the two most recent years.
| Tax year | Children | Maximum credit | Income ceiling (not joint) | Income ceiling (joint) |
|---|---|---|---|---|
| 2025 | 0 | $649 | $19,104 | $26,214 |
| 2025 | 1 | $4,328 | $50,434 | $57,554 |
| 2025 | 2 | $7,152 | $57,310 | $64,430 |
| 2025 | 3+ | $8,046 | $61,555 | $68,675 |
| 2026 | 0 | $664 | $19,540 | $26,820 |
| 2026 | 3+ | $8,231 | $62,974 | $70,244 |
Investment income must be $11,950 or less for 2025 and $12,200 or less for 2026. These figures change every year, so confirm them in the current Publication 596 before relying on them.
Core requirements
- You need earned income, and your filing status matters. Married couples generally must file jointly, with a narrow exception for certain separated spouses who have a qualifying child.
- You, your spouse and any child used for the increased credit need valid SSNs. ITINs don't count.
- You generally must be a US citizen or resident alien all year. You cannot claim the EIC if you file Form 2555 to exclude foreign income.
- You can't be another taxpayer's qualifying child.
The Form 2555 point matters for expats. Excluding foreign earned income and claiming the EIC are mutually exclusive.
What counts as earned income
- Included: wages, salaries, tips, other taxable employee pay and net self-employment earnings
- Excluded: interest, dividends, unemployment compensation, Social Security, pensions and annuities
Qualifying-child tests
| Test | Requirement |
|---|---|
| Relationship | Child, stepchild, adopted or eligible foster child, sibling, or a descendant such as a grandchild or niece |
| Age | Under 19 and younger than you; under 24 and a full-time student; or any age if permanently and totally disabled |
| Residency | Same US home for more than half the year, with exceptions for temporary absences, birth, death and military service |
| Joint return | Generally no joint return, unless filed only to recover withheld tax |
Competing claims
Two people cannot both claim the same child. A parent generally wins over a non-parent. If two parents compete, the one with the longer residence wins, then the higher AGI if residence is equal.
A non-parent such as a grandparent can claim only if their AGI is higher than every eligible parent's. In the IRS example, a parent with $9,000 AGI and a grandparent with $22,000 means the grandparent may claim. If the parent's AGI is $25,000, the grandparent cannot.
For an estimate, use the IRS EITC Assistant instead of guessing from fixed tables.
How to Find, Enter and Verify the EIC on Your Return
Step by step
- Gather W-2s, 1099s, self-employment records and withholding or payment documents.
- Confirm your filing status.
- Review earned income, AGI and investment income against the limits.
- Check SSNs for everyone on the claim.
- Evaluate each qualifying child against the relationship, age and residency tests.
- Use the current Form 1040 instructions, worksheets and EIC Table (or tax software) to calculate the credit.
- Enter the amount on line 27a, or write "EIC" beside it to have the IRS calculate it.
Final review checklist
- The form matches your tax year
- The amount is on the correct line
- Schedule EIC is attached if you claim children
- Child details match your records
- Income figures agree with W-2s and 1099s
Expect a refund delay
By law, the IRS cannot release refunds on returns claiming the EITC or ACTC before mid-February. The hold covers the entire refund, not just the credit. This is separate from the usual three-week e-file benchmark.
Common EIC Filing Mistakes and When to Get Help
Common EIC mistakes include:
- Using an outdated Form 1040
- Entering the credit on the wrong line
- Confusing the EIC with the Child Tax Credit
- Leaving out Schedule EIC
- Using an invalid SSN
- Claiming a child who fails the residency or relationship tests
- Over- or under-reporting income
Consequences of a wrong claim
Getting EIC wrong can cost more than a corrected return:
- You repay the erroneous refund plus interest
- Form 8862 is generally required before you can claim again after a disallowance
- You can be barred from the credit for two years for reckless or intentional disregard, and 10 years for fraud
- A 20% accuracy-related penalty may apply to the underpayment, though reasonable-cause relief exists
Paid preparers also face due diligence rules, including completing Form 8867.
When to get help
Professional support makes sense when your facts are complex. Common triggers include:
- Split custody arrangements
- Self-employment income
- A past EIC disallowance
- Uncertainty about US compliance while living abroad
VJM Global's tax professionals are trained in US tax law and IRS regulations, including Form 1040, and can review your situation. The firm prepares Form 1040 and 1040-NR returns for US individual taxpayers.
No preparer can guarantee eligibility, and the final determination rests with the IRS.
Frequently Asked Questions
Where is the EIC on Form 1040?
On the 2025 Form 1040 and 1040-SR, it is line 27a. Confirm the line on the form for your own tax year, as it moved from line 27 on the 2024 form.
Is the EIC still around?
Yes. The IRS has published 2026 amounts, with a maximum of $8,231 for three or more children. Limits adjust annually, and the 2026 figures generally apply to returns filed in 2027.
What does EIC stand for?
Earned Income Credit. EITC (Earned Income Tax Credit) is the fuller name for the same credit.
Is EIC the same as EITC?
Yes. Both terms describe the same refundable federal credit. The Form 1040 uses "EIC", while IRS guidance and tax software often use "EITC".
Do I need Schedule EIC with Form 1040?
Generally yes if you claim the credit with a qualifying child. A childless claim generally doesn't need it, but check the current-year instructions for exceptions.
Can I claim the EIC if I do not have children?
Possibly. For 2026, you or a joint-filing spouse must be 25 to 64 at year-end. You also need a US main home for more than half the year, valid SSNs, and income under $19,540 ($26,820 jointly).
