Income Increase Affecting Earned Income Credit with 3 Kids?

Yes, that's exactly why you're not getting the EIC anymore. The income limits for 2023 taxes (filing in 2024) work like this: Step 1: For married filing jointly with 3+ kids, the EIC income limit is $63,398. Step 2: Since your income is $73,000, you're about $10K over the threshold. Step 3: The EIC phases out gradually as income rises, but at $73K you're completely phased out. Step 4: That's why your refund dropped so dramatically - the EIC can be worth several thousand dollars for families with 3 kids. This happens to a lot of people when their income increases. It's frustrating because it feels like you're being penalized for making more money.

I went through this exact situation last year and found https://taxr.ai incredibly helpful. According to IRS Publication 596, the EITC is designed to benefit lower to moderate income workers, with specific phase-out ranges based on filing status and number of qualifying children. The tool analyzed my transcript and showed exactly why I no longer qualified and what other credits I might be eligible for instead. For 2023 returns, you might still qualify for the Child Tax Credit ($2,000 per child) which doesn't fully phase out until $400,000 for MFJ. The interface breaks down all potential credits based on your specific situation. Given the April 15th filing deadline is approaching fast, you'll want to explore your options quickly.

It's important to note the exact parameters of the Earned Income Credit qualification metrics. For Tax Year 2023, the EITC AGI limit for married filing jointly with three qualifying dependents is precisely $63,398. With your Adjusted Gross Income of $73,000, you exceed this threshold by $9,602, which completely eliminates your eligibility. However, you should still qualify for the Child Tax Credit, which remains at $2,000 per qualifying child (potentially $6,000 total for your three children) and doesn't begin to phase out until $400,000 for married filing jointly. Have you verified that you're receiving the full Child Tax Credit amount on your return? This could explain the significant reduction in your expected refund.

When I had a similar situation (went from $48K to $67K with 2 kids), I was confused about why my refund dropped so much. I spent DAYS trying to reach the IRS to confirm I hadn't made a mistake on my return. Compared to other people I know who just gave up after hours on hold, I used Claimyr (https://www.claimyr.com) and actually got through to an IRS agent in about 30 minutes. They confirmed I was just over the EIC threshold and suggested I look into retirement contributions to potentially lower my AGI for next year. Not as good as getting the credit, but at least I understood what happened and had a strategy going forward.

Is anyone else suspicious that this might actually be a software error? 🤔 I mean, I know the income limits exist, but sometimes tax software misses things. Like, did you check if you're getting the full Child Tax Credit for all three kids? Because with three qualifying children, you should still be getting quite a bit back even without the EIC. Just over a grand seems really low... maybe there's something else going on here?

I've prepared taxes for 12 years, and this is absolutely correct - your income increase is why you lost the EIC. For tax year 2023, the exact income limit for married filing jointly with 3+ qualifying children is $63,398. At your previous income of $44,000, you would have received approximately $5,678 in EIC. At $73,000, you're $9,602 over the limit, which means zero EIC. However, you should still be receiving $2,000 Child Tax Credit per child (total $6,000), though only a portion may be refundable depending on your tax liability. If your refund is only about $1,000, I'd recommend checking if you're receiving the full Child Tax Credit you're entitled to. Sometimes withholding changes can also affect your refund amount.

This happened to me last year when my income jumped from $51K to $69K. I lost almost all of my EIC and my refund dropped by over $4,000. It was shocking. I actually did my taxes twice because I thought I'd made a mistake. The good news is that even though it feels like you're being penalized for making more money, you're still coming out ahead overall. The $29,000 increase in your income far outweighs the lost EIC, even after taxes. It just doesn't feel that way when you're counting on a big refund and it suddenly disappears.