EITC and Child Tax Credit Increased for 2026 Tax Year; New Investment-Income Cap Applies
The IRS confirmed higher Earned Income Tax Credit amounts for 2026, with families receiving up to $8,231 (up to three children). A new restriction limits eligibility for those with more than $12,200 in investment income, and the Child Tax Credit remains at $2,200 per child.
The Internal Revenue Service has finalized 2026 tax-year amounts for key family tax credits that will apply when you file in early 2027. These credits remain among the nation's most significant anti-poverty tools, benefiting millions of low- and moderate-income working families.
Earned Income Tax Credit (EITC) 2026 Amounts
The maximum earned income tax credit will increase to $8,231 in 2026 for qualifying taxpayers with three or more eligible children (up from $8,046 in 2025); for two children, the maximum EITC will increase to $7,316, up from $7,152 in 2025; for one child, the maximum will be $4,427, up from $4,328 in 2025; and for filers with no children, the maximum amount will be $664, up from $649.
New Investment-Income Restriction
Beginning 2026, taxpayers with investment income that exceeds $12,200 will no longer qualify for the EITC. This is a tightened eligibility criterion compared to prior years. Affected filers should review dividend, interest, and capital-gains income carefully before claiming.
Child Tax Credit Stability
For 2026 (returns you'll typically file in early 2027), the maximum credit will remain at $2,200 per qualifying child, and the refundable portion of the CTC will stay at up to $1,700 per child. The credit phases out for higher earners; taxpayers might qualify for the full amount for each child if they earn $200,000 as an individual filer or $400,000 for joint filers, with the credit phasing out completely for incomes above that threshold.
Income Phase-Out Levels
Married couples filing jointly will completely phase out at $70,224 in adjusted gross income if they have three or more children, $65,899 in AGI with two children, $58,863 with one child, and $26,820 with no children; for single, head of household, or widowed filers, the EITC will completely phase out at $62,974 for those with three or more children, $58,629 for two children, $51,593 for one child, and $19,540 for no children.
What This Means for Expats
If you're a U.S. citizen or resident alien living abroad or in the U.S. with low to moderate earned income, check whether you qualify for the EITC when filing your 2026 return in 2027. The credit requires valid work-authorization Social Security numbers. Expats with portfolio income (interest, dividends, or capital gains) should ensure their investment income stays under $12,200 to preserve EITC eligibility. Families with qualifying children should also review CTC eligibility—new OBBBA rules require work-eligible Social Security numbers. File early and consider using IRS free-file options to claim these credits.
Sources
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