Every tax season, roughly one in five eligible Americans never claims the Earned Income Tax Credit.
The IRS has estimated that gap at about $7 billion a year in unclaimed money.
It's a refundable credit built for people who work but don't earn much, and it's sitting there uncollected.
The credit is aimed at low- and moderate-income workers, and the amount scales with your earnings and how many kids you support.
For the 2024 tax year, the maximum credit runs from $632 for a childless worker to $7,830 for a family with three or more qualifying children, according to IRS figures.
Because it's refundable, you can get money back even if you owe no tax at all.
The catch is that the people who need it most are the least likely to claim it.
Gig workers, part-time employees, and people who changed jobs mid-year often assume they don't qualify.
Others skip it because filing costs money or because a paid preparer never asked.
The credit is also tied to income limits — around $66,819 for a family with three kids in 2024 — and those thresholds trip people up.
The EITC is one of the most audited programs in the tax code, and error rates are high on both sides.
The IRS flags a disproportionate share of claims from Black and Latino filers for review, according to years of agency data.
So the same credit that's meant to lift working families also carries a real risk of a frozen refund and a paperwork headache.
Each year, tax season brings a wave of "free money" ads promising to maximize your EITC for a fee, sometimes taking a cut of the refund.
The IRS never charges to claim it, and free filing options exist through IRS Free File and the Volunteer Income Tax Assistance program for people under roughly $67,000 in income.
The federal government keeps the money, and paid tax prep firms lose a customer who never walks in.
Neither has much incentive to knock on your door.
If you worked at all last year — even part-time, even for part of the year — it's worth ten minutes to check.
The IRS has an online EITC Assistant that walks through the eligibility rules, and it won't cost you anything but time. **Our take:** The EITC is one of the few tax breaks that actually reaches working-class households, but it comes with bureaucratic friction and audit exposure that keeps too many people away.
Treat any service charging a percentage of your refund as a red flag.
Final Thoughts
The credit is yours to claim directly, and checking costs nothing.