Can I Get Earned Income Credit if I Receive Social Security?
Learn how Social Security benefits impact your eligibility for the Earned Income Credit and what factors determine whether you can claim it on your tax return.
The Earned Income Credit (EIC) is a tax benefit designed to assist low- to moderate-income workers by reducing their tax burden and potentially providing a refund. However, not all income qualifies, which can create confusion for those receiving Social Security benefits.
Determining eligibility while receiving Social Security depends on factors such as total earnings, filing status, and household composition.
Basic EIC Qualification Criteria
To qualify for the EIC, you must have earned income from employment or self-employment, such as wages, salaries, tips, or net earnings from a business. Passive income, including interest, dividends, and rental income, does not count. The IRS sets income limits based on filing status and the number of qualifying children.
For 2024, the maximum adjusted gross income (AGI) to claim the credit is:
– $17,640 for single filers with no children
– $24,210 for single filers with one child
– $46,560 for single filers with two children
– $53,120 for single filers with three or more children
– $63,398 for married couples filing jointly with three or more children
Age and residency also affect eligibility. If you do not have qualifying children, you must be between 25 and 64 years old at the end of the tax year. Those with children must meet relationship, residency, and support requirements. A qualifying child must be under 19 (or under 24 if a full-time student) and live with the taxpayer for more than half the year. The child cannot file a joint return unless claiming a refund of withheld taxes.
Differentiating Earned Income From Social Security
Social Security benefits, including retirement, disability (SSDI), and survivor benefits, are not considered earned income. The IRS defines earned income as money received from active work, such as wages or self-employment profits. Since Social Security payments come from past contributions rather than current labor, they do not count toward EIC eligibility.
However, individuals receiving Social Security may still qualify if they also have earned income. For example, someone collecting Social Security retirement benefits while working part-time can use their wages to meet the earned income requirement. Similarly, a self-employed individual receiving SSDI may qualify if their net business income falls within IRS guidelines. Supplemental Security Income (SSI), a needs-based program, is also excluded from earned income calculations.
Calculating EIC When Receiving Social Security
To determine EIC eligibility while receiving Social Security, you must first calculate your earned income. Only wages from a job or net earnings from self-employment count. Self-employed individuals should note that net earnings are calculated after deducting business expenses, and the IRS reduces net income by 50% of self-employment taxes paid.
The EIC increases as earned income rises, up to a certain threshold, before gradually phasing out as total income—including non-earned sources like Social Security—exceeds the limit. For 2024, a single filer with one child can receive a maximum credit of $3,995, but if their AGI surpasses $46,560, the credit is reduced until it is eliminated. These thresholds vary based on the number of qualifying children and filing status, so reviewing updated IRS tables each year is important.
If Social Security benefits are taxable—such as when combined income exceeds $25,000 for single filers or $32,000 for married couples—this does not affect EIC eligibility but can impact overall tax liability. Taxable Social Security is included in AGI, which determines whether the credit phases out, but it is not counted as earned income.
Filing Status and Household Composition
Your filing status and household structure affect EIC eligibility. The IRS recognizes five filing statuses: Single, Married Filing Jointly, Married Filing Separately, Head of Household, and Qualifying Surviving Spouse. However, not all provide the same advantages when claiming the credit.
Head of Household status often allows for a higher income threshold before the credit phases out, making it beneficial for single parents or those supporting a dependent. To qualify, the filer must pay more than half of household expenses and have a dependent living with them for over half the year.
Married couples generally receive the most favorable EIC benefits when filing jointly, as income limits are higher. Those who file separately are ineligible for the credit.
Household composition also affects eligibility when multiple taxpayers claim the same dependent. If more than one person qualifies to claim a child for EIC purposes, IRS tiebreaker rules apply, prioritizing parents over other relatives and considering AGI.
Claiming the Credit on Your Tax Return
If you qualify for the EIC while receiving Social Security, you must file Form 1040 and complete Schedule EIC if you have qualifying children. Those without children do not need the additional schedule but must still meet income and filing requirements.
To ensure accuracy, taxpayers should use the IRS EIC worksheet or tax software that automatically determines eligibility. The credit amount depends on earned income, filing status, and the number of dependents. The IRS provides an EIC table each year to help filers determine their exact credit.
If claiming dependents, Social Security numbers must be valid for employment, and the child must meet residency and relationship requirements. Incorrectly claiming a child or misreporting income can lead to penalties, including a ban on claiming the credit for up to 10 years in cases of fraud.