Earned Income Credit drop

[moshea111]

Why did my EIC drop from 1573 last year to only 758 this year. My gross income went up from 29,792 last year to 37,170 this year but I think that keeps me in the same tax bracket? I cant figure out what changed?  

[AJ]

The Earned Income Credit (EIC) varies based on your filing status, your number of children, and your income. Graphs for the earned income credit look a bit like a pyramid with the top cut off.  That is, the credit begin with a zero credit and zero income, and then the credit increases as income increases--up to some EIC maximum amount for your filing status and number of children.  Then the EIC remains constant as income increases--up to some income point.  Then, the EIC will decrease as income increases until the amount of the EIC returns to zero dollars.  The EIC amounts do not directly correspond to your "tax bracket".  From the numbers that you provided, I am taking a guess that you are filing as single, or head-of-household, with one child.  If that is the case, then you are on the high side of the EIC table.  That is, as you earn more income, then the amount of the EIC will decrease.  But I do not recommend that anyone should try to maximize EIC.  I recommend that you earn all that you can because you and your family will be much better off in the long run with that approach.