The rules the exam tests
| Rule | What it says (2025) | Source |
|---|---|---|
| Maximum credit 2025 | $649 (0 children) / $4,328 (1) / $7,152 (2) / $8,046 (3+) | Rev. Proc. 2024-40 |
| Investment income limit | $11,950 | Rev. Proc. 2024-40 |
| No qualifying child | Age 25-64, U.S. home >1/2 year, not a dependent | IRC 32(c)(1)(A)(ii) |
| Qualifying child tests | Relationship, age, residency (U.S. >1/2 year), joint return; no support test; valid SSN | IRC 32(c)(3) |
| Married filing separately | Allowed only if separated (apart last 6 months or legally separated) with a qualifying child | IRC 32(d)(2) |
| Earned income | Wages, tips, net SE earnings; not unemployment, Social Security, pensions or alimony | IRC 32(c)(2) |
| Disallowance ban | 2 years (reckless/intentional disregard), 10 years (fraud); Form 8862 to reclaim | IRC 32(k) |
| Refund timing | No EITC/ACTC refunds before mid-February (PATH Act) | IRC 6402(m) |
| Preparer due diligence | Form 8867, knowledge, computation, records 3 years; $650 per failure (2026 filings) | IRC 6695(g) |
Facts: Leo (31, single) has two children who lived with him all year, $28,000 of wages and $1,200 of bank interest.
Analysis: Investment income ($1,200) is under $11,950. Both children meet relationship, age and residency tests; no support test applies. Leo qualifies with two children (maximum $7,152 for 2025; the exact amount comes from the EIC table at $28,000). His preparer must complete Form 8867 and document the children’s residency.
Exam traps
- There is no support test for an EITC qualifying child; students 19-23 must be full-time.
- Tax-exempt interest counts as investment income.
- Combat pay can be elected into earned income for the EITC.
- An MFS filer qualifies only under the separation rules.
Earned income tax credit (EITC): 10 free practice questions
Earned income tax credit (EITC) practice questions
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Frequently asked questions
Can I claim the EITC without children?
Yes, if you are 25-64, lived in the U.S. over half the year, are not someone’s dependent and meet the income limits. The 2025 maximum is $649.
What happens if the IRS denies my EITC?
You may need Form 8862 the next time you claim it; reckless disregard brings a 2-year ban and fraud a 10-year ban.
Sources
- IRS Publication 596 - Earned Income Credit (accessed 2026-09-23)
- IRS - Earned income and EITC tables (accessed 2026-09-23)
- IRS Rev. Proc. 2024-40 - 2025 inflation adjustments (accessed 2026-09-23)
- 26 U.S.C. 6695 - Other assessable penalties with respect to preparation of returns (accessed 2026-09-23)
- IRS - Enrolled agents: Frequently asked questions (accessed 2026-09-23)