The Earned Income Credit (EIC) is entered on Form 1040 or Form 1040-SR, Line 27a (for tax year 2025). This line is used to report the total EIC amount calculated from the IRS EIC worksheet.
How the Credit Is Entered
- Form 1040, Line 27a: Enter the total Earned Income Credit amount.
- If applicable, you must also attach or retain the EIC Worksheet from the Form 1040 instructions.
- Tax software typically calculates and transfers the amount automatically once eligibility inputs are completed.
How the EIC Is Calculated
Before entering the credit on Line 27a, you must determine eligibility using the IRS worksheet or EIC Table:
Earned Income Includes:
- Wages, salaries, and tips (Form W-2)
- Net self-employment income (Schedule C / Schedule SE)
- Certain taxable disability payments
- Elective inclusion of nontaxable combat pay (if chosen)
Earned Income Does NOT Include:
- Interest and dividends
- Social Security benefits
- Unemployment compensation
- Pensions and annuities
Qualifying Child Structure (for credit amount)
The EIC amount is based on:
- Filing status
- Number of qualifying children (0, 1, 2, or 3+)
- Earned income or AGI (whichever is higher for calculation purposes)
The IRS provides a separate EIC Table in the Form 1040 instructions to determine the exact credit amount.
Eligibility Limits
Eligibility depends on:
- Earned income and AGI below IRS phase-out thresholds
- Valid SSN requirements for taxpayer, spouse, and qualifying children
- Investment income below the statutory limit
- Filing status restrictions (Married Filing Separately filers are disqualified unless they meet special statutory separation exceptions, such as living apart for the final 6 months of the year)
(Exact dollar thresholds must be taken from the official 2025 EIC Table in the Form 1040 instructions, as they change annually.)
EIC Eligibility Thresholds (2025)
- 3 or more qualifying children: Earned income must be less than $61,555 ($68,675 if married filing jointly).
- 2 qualifying children: Earned income must be less than $57,310 ($64,430 if married filing jointly).
- 1 qualifying child: Earned income must be less than $50,434 ($57,554 if married filing jointly).
- No qualifying children: Earned income must be less than $19,104 ($26,214 if married filing jointly).
Source:
Form 1040 Instructions (2025)
Disclaimer: Always verify details with the current year’s Federal or State Department of Revenue Forms and Instructions. For complex situations, consult a CPA or tax attorney.