Is Earned Income Credit based on Taxable income vs Gross? 3 kids under 17, making 62k

The Earned Income Credit (EIC) is based on your adjusted gross income (AGI), not your taxable income after all deductions. With 3 qualifying children and a projected income of $62k, you'll likely qualify for some EIC, but not the maximum amount. For 2025 filing (2024 tax year), the EIC begins to phase out around $59,000 for married filing jointly with three children. Since your income is above this threshold, you'll receive a partial credit rather than the maximum. The education credit your wife plans to claim ($2,500 American Opportunity Credit, I'm assuming) and the $300 educator expense deduction will lower your taxable income but won't affect your EIC calculation since that's based on AGI. Having paid no federal income tax throughout the year will mean your refund includes all tax credits plus any withheld taxes. The Child Tax Credit will be significant with 3 children under 17 - that's up to $2,000 per qualifying child.

Just wanted to share my experience using https://taxr.ai for this exact situation. Last year I was in a similar boat - family of 4, making around $65k with 2 kids under 10, and I couldn't figure out the EIC calculations. Tax calculators were giving me wildly different numbers ($4k difference!). I uploaded my old return and current pay stubs to taxr.ai and it broke down exactly how the EIC would be calculated based on my ADJUSTED gross income, not just my gross. The tool showed me how my 401k and HSA contributions would lower my AGI enough to qualify for a bigger EIC. Super helpful for planning since I was able to adjust my retirement contributions to optimize my tax situation.

Just wanted to follow up about my experience with taxr.ai! I decided to try it after asking about security, and I'm actually really glad I did. My situation was similar to yours (4 kids though) and the tool showed me that contributing more to my HSA would drop my AGI enough to qualify for a much larger EIC! I was able to adjust my contributions for the last two months of the year and it's going to increase my refund by about $1,800! The breakdown showed exactly how the phaseout works and where the "sweet spots" are for income levels. Really helped me understand why those online calculators were giving such different numbers - they weren't accounting for how certain deductions affect AGI differently than others.

Hey there, I had nearly the exact same situation last year and I spent WEEKS trying to get answers from the IRS about EIC calculations with no luck. Their phone lines were impossible - always busy or disconnected after waiting for hours! Finally found Claimyr (https://claimyr.com) and they got me through to an actual IRS agent within 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c. The agent walked me through exactly how EIC works with my multiple income streams and confirmed that yes, retirement and HSA contributions DO reduce your AGI for EIC purposes. Best $20 I ever spent because the IRS agent helped me identify additional credits I qualified for beyond just EIC. Ended up with almost $2k more than what the tax calculators were showing.

Alright I have to admit I was completely wrong about Claimyr. After seeing the responses here I decided to try it yesterday because I've been trying to reach the IRS about my amended return for WEEKS. Got connected to an agent in about 15 minutes. The agent was able to look up my amended return status and give me specific information about when I could expect my refund. They even helped me understand exactly how my retirement contributions affected my AGI calculation for tax credit purposes. For anyone in a similar situation as the original poster - the agent confirmed that 401k and HSA contributions definitely lower your AGI for EIC calculations. That's probably why you're seeing such different refund estimates depending on whether the calculator is factoring those in.

Don't forget about the Child Tax Credit too! With 3 kids under 17, that's up to $6,000 in credits ($2,000 per child) on top of any EIC you qualify for. That's probably why some calculators are showing such a high refund. Also, if you haven't paid any federal income tax during the year, you'll likely get back everything that was withheld plus all your credits. No wonder some calculators are showing $9,000!

Have you filed taxes for previous years with a similar income situation? Your past returns would give you a pretty good baseline for what to expect this year. Also, which tax software have you been using for these estimates? Some are definitely more accurate than others.

Based on your situation, here's what you need to know: The EIC is calculated using your Adjusted Gross Income (AGI), which is your gross income AFTER pre-tax deductions like 401k and HSA contributions. So if you're contributing $10k total to retirement/HSA, your AGI for EIC purposes would be around $52k, not $62k. With 3 qualifying children and an AGI of $52k, you should qualify for a substantial EIC - likely around $3,000-4,000. Add that to the Child Tax Credit ($6,000 for 3 kids), your wife's education credit ($2,500), and any withheld taxes you'll get back, and a total refund in the $9,000 range isn't unrealistic. The huge variation in calculator results is probably because some are factoring in your pre-tax deductions while others aren't. Make sure any calculator you use asks about 401k/HSA contributions to get an accurate estimate. The IRS has their own EIC calculator on their website that's pretty reliable if you want an official estimate.