What is Form 1040 Line 27a — Earned Income Credit?

The Earned Income Credit (EIC) -- a refundable tax credit for low-to-moderate income workers. "Refundable" means it pays you even if you owe zero tax. The credit amount depends on your earned income, filing status, and number of qualifying children. For 2025, the maximum EIC is $649 (no children), $4,328 (one child), $7,152 (two children), or $8,046 (three or more children). This is one of the largest anti-poverty programs in the federal tax code. Filers with investment income (interest,...

What do people miss on Form 1040 Line 27a?

The IRS estimates that roughly 20% of eligible taxpayers fail to claim the Earned Income Credit every year -- leaving billions of dollars unclaimed. Common reasons include not knowing the credit exists, assuming they earn too much, or not filing a return at all because their income was below the filing threshold. Freelancers, gig workers, and side-hustle earners with net self-employment income qualify for the EIC based on that income. Many self-employed filers focus on Schedule C and...

What is the common mistake on Form 1040 Line 27a?

Starting with tax year 2021, MFS filers can claim the EIC if they had a qualifying child who lived with them for more than half the tax year AND at least one of the following applies: (1) they lived apart from their spouse for the last 6 months of the tax year, or (2) they were legally separated under a written separation agreement or decree of separate maintenance and did not live in the same household as their spouse at the end of the tax year. If neither condition is met, MFS filers still...

Form 1040 Line 27a — Earned Income Credit (2024)

Total wages; one component of earned income for EIC calculation

27a — Earned Income Credit Tax year 2024

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