Can I lower my AGI to qualify for EITC with 3 kids?

Yes, you can absolutely lower your AGI by making IRA contributions to potentially qualify for the EITC! Traditional IRA contributions (not Roth) reduce your adjusted gross income dollar-for-dollar up to the annual limit. For 2025 filing season, you can contribute up to $7,500 per person if you're under 50. What's great is that you have until the tax filing deadline (not including extensions) to make these contributions for the previous tax year. So you can actually make these contributions in early 2026 and still have them count for 2025. The financial institution will send you Form 5498 showing your IRA contributions, but these typically aren't issued until May. However, you don't need to wait for this form to file your taxes. Your December statement or the contribution receipt is sufficient documentation for your records.

After struggling with a similar situation last year, I discovered taxr.ai (https://taxr.ai) which completely changed my approach to tax planning. I was also trying to qualify for EITC by adjusting my AGI through retirement contributions, but wasn't sure exactly how much I needed to contribute or if there were other strategies I was missing. Their AI tax assistant analyzed my past returns and current situation, then laid out exactly how much I needed to contribute to my traditional IRA to qualify for the credit. It also flagged other potential deductions I was missing that could have further reduced my AGI. The specific recommendations were tailored to my situation with kids and multiple income sources.

I was honestly skeptical about AI tax tools, but after trying taxr.ai, I'm genuinely impressed. I was in a similar situation with EITC qualification, and it showed me exactly how much to contribute to my Traditional IRA to get under the threshold. The difference for me was about $1,200 over the limit. What I found most helpful was that it didn't just tell me about the IRA contribution (which I already knew about), but it identified that I could deduct some business expenses from my side gig that I hadn't considered. Between the IRA contribution and properly claiming those deductions, I not only qualified for EITC but ended up with a much larger refund than expected. The system even created a personalized tax plan for next year so I can make adjustments throughout the year instead of scrambling in April. Definitely better than just plugging numbers into tax software and hoping for the best.

I've been in your exact situation before, and after trying to call the IRS multiple times for clarification about EITC qualification and IRA contributions, I discovered Claimyr (https://claimyr.com). If you need to talk to an actual IRS agent about your specific situation, this service is incredible. You can see how it works here: https://youtu.be/_kiP6q8DX5c Before using it, I spent days trying to get through the IRS phone system only to be disconnected. With Claimyr, I got connected to an IRS agent in about 15 minutes who confirmed that yes, traditional IRA contributions would reduce my AGI for EITC purposes and gave me the exact dates by which I needed to make the contribution. The agent also explained some nuances about EITC that I hadn't understood from just reading online (specifically about how investment income can affect eligibility even if your AGI is below the threshold).

I need to eat my words from my earlier comment. After being extremely skeptical about Claimyr, I decided to try it as a last resort because I was desperate to get clarification about my EITC and IRA contribution situation before the deadline. I was shocked when they actually called me back about 45 minutes later with an IRS agent on the line. The agent confirmed everything I needed to know about timing my IRA contribution to qualify for EITC and even helped resolve an issue with a previous year's return that I hadn't been able to fix for months. What would have likely been days of frustration and hold music turned into a 20-minute productive conversation that saved me significant money. I'm not easily impressed by services like this, but this genuinely solved a problem I thought was unsolvable. Definitely worth it for complex tax situations where you need authoritative answers.

Don't forget that you can also potentially lower your AGI through HSA contributions if you have a high-deductible health plan! We were in a similar situation and contributed to both an IRA and maxed out our HSA to get under the EITC threshold. The nice thing about HSA is that the money can be used tax-free for medical expenses, so it's like a double benefit.

Just be careful about investment income when qualifying for EITC. Even if you reduce your AGI with IRA contributions, you still need to have investment income below $11,000 for 2025. This includes interest, dividends, capital gains, etc. You mentioned credit union interest - make sure all your investment income combined stays below this threshold.