EITC vs CTC — Understanding Both Tax Credits
Both credits help families, but they work differently and target different situations. Many families qualify for both — understanding the distinction helps you maximize your total benefit.
Check both credits with the EITC Calculator and Child Tax Credit Calculator.
Quick Comparison
| Feature | EITC | CTC |
|---|---|---|
| Purpose | Reward low-to-moderate income workers | Support families with children |
| Max credit (2026) | $7,830 (3+ children) | $2,000 per child |
| Refundable? | 100% | Partially ($1,700/child ACTC) |
| Children required? | No (smaller credit without) | Yes (must have qualifying child under 17) |
| Earned income required? | Yes | No (but ACTC requires earned income) |
| Income phase-out (MFJ) | $59,899 (2 children) | $400,000 |
| Investment income limit | $11,600 | None |
| Filing status restriction | Can't use MFS | Can use any status |
Who Gets What — By Income
Married filing jointly, 2 children under 17:
| Income | EITC | CTC | Combined |
|---|---|---|---|
| $10,000 | $1,600 | $4,000* | $5,600 |
| $20,000 | $5,700 | $4,000 | $9,700 |
| $30,000 | $6,100 | $4,000 | $10,100 |
| $40,000 | $4,800 | $4,000 | $8,800 |
| $55,000 | $1,200 | $4,000 | $5,200 |
| $65,000 | $0 | $4,000 | $4,000 |
| $150,000 | $0 | $4,000 | $4,000 |
| $350,000 | $0 | $4,000 | $4,000 |
| $420,000 | $0 | $3,000 | $3,000 |
*At $10,000, the CTC is $4,000 but some may not be refundable due to ACTC earned income formula.
The sweet spot for combined benefits is $20,000-$35,000 income — where both credits are near their maximum.
Key Differences Explained
Income Direction
The EITC targets low-to-moderate earners and phases out by ~$60K. The CTC is available up to $400K-$440K. A family earning $200,000 gets zero EITC but the full $4,000 CTC.
Refundability
The EITC is fully refundable — every dollar of the credit can become a cash refund. The CTC is only partially refundable through the ACTC (up to $1,700/child). A family with zero tax liability gets their entire EITC as a refund but may not get the full CTC.
Children
The EITC has a version for childless workers ($632 max). The CTC requires children under 17 — no children, no credit (though the $500 Other Dependent Credit covers non-child dependents).
Investment Income
The EITC has a hard $11,600 investment income cap — go over by $1, lose the entire credit. The CTC has no investment income limit. A retired couple with $50,000 in dividends raising a grandchild gets the CTC but not the EITC.
Situations Where Only One Credit Applies
EITC only (no CTC):
- Single worker, age 28, no children, earning $15,000 → $500 EITC, $0 CTC
- Parent with child age 18 (not a student) → EITC if child is qualifying, CTC requires under 17
CTC only (no EITC):
- Family earning $100,000 with 2 children → $4,000 CTC, $0 EITC (over income limit)
- Retired couple raising grandchild with pension income only → CTC (no earned income for EITC)
- Family with $15,000 in investment income → CTC (EITC disqualified by investment income cap)
Both credits:
- Working family earning $25,000-$50,000 with children under 17 → Maximum combined benefit zone
Filing Strategy
If you qualify for both, there's no strategy needed — claim both on the same return. They're calculated independently on different schedules:
| Credit | Form/Schedule |
|---|---|
| EITC | Schedule EIC |
| CTC / ACTC | Schedule 8812 |
Tax software handles both automatically. Just ensure you enter:
- All qualifying children with correct SSNs and birth dates
- All earned income (W-2s and self-employment)
- Investment income (relevant for EITC)
Refund timing: If you claim either the EITC or ACTC (refundable CTC portion), your entire refund is held until mid-February under the PATH Act.
For your complete tax picture, use the Federal Tax Calculator.
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