Earned Income Tax Credit - United Way for Southeastern Michigan

The Earned Income Tax Credit (EITC) provides a tax credit to working people with low to moderate income. Qualifying individuals receive a cash payment (via direct deposit or paper check) after filing their taxes. The IRS starts sending refunds in mid-February. By law, the IRS is not allowed to send EITC refunds during the first few weeks of tax season.

In addition to the EITC credit from the federal government, Michigan now offers an expanded state EITC credit. This means more money in your pocket if you qualify!

To claim your credit, you must file a tax return, even if you do not owe any tax or are not otherwise required to file. If you worked full or part time in 2024, you may qualify for the credit.

Who qualifies?

You must have earned income (from working) in 2024 to qualify. If you have some earned income, you can qualify even if you receive other benefits. The details vary depending on your tax filing status and number of children in your household. All of the adults and children on your tax return must have a Social Security Number for your household to qualify.

Qualifying children can include your biological children, adopted children, grandchildren, younger siblings, and nieces and nephews. To qualify, children must live with you at least half of the year and be under age 19, be under 24 and a full time student, or be permanently disabled.

What’s changed about the Michigan EITC?

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In 2023, changes to Michigan law increased the amount of the Michigan Earned Income Tax Credit for Working Families (also known as the Michigan EITC or the Working Families Tax Credit). The Michigan EITC uses the same eligibility criteria as the federal EITC. The amount of the Michigan credit is calculated as a percentage of the amount the family or individual receives from the federal EITC.

Previously, the Michigan EITC was calculated as 6% of the federal EITC. For example, if a family qualified for a $3000 federal EITC refund, they received an additional $180 ($3000 x 6%) from the state of Michigan when filing their state taxes.

Under the new law, starting with taxes filed in 2023 (for tax year 2022), the Michigan credit was increased to 30% of the federal credit. In the same example, a family qualifying for a $3000 federal EITC refund will now receive an additional $900 ($3000 x 30%) from the state of Michigan.

How do I claim the expanded Michigan EITC this year?

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When you file your taxes in 2025, the Michigan EITC will be automatically calculated at the new amount and included in your regular refund. You do not need to take any special action, but you do need to file taxes in 2025. We can help! Get expert help filing your taxes at no cost to you.