Earned Income Tax Credit for Self‑Employed and Gig Workers: Key Things to Know

The Earned Income Tax Credit (EITC) can provide a significant refund for workers with low to moderate income — and that includes many self‑employed people, freelancers, and gig workers.

This guide explains how the EITC typically works when you’re not a traditional W‑2 employee, what to watch out for, and how to move forward through official tax channels.

HowToGetAssistance.org is not a government agency, tax preparer, or application site. This article is for general information only and is meant to help you understand typical next steps with the IRS or an official tax assistance program.

What Is the Earned Income Tax Credit (EITC)?

The EITC is a federal tax credit for people who earn income from working. It is designed to support low‑ to moderate‑income workers and families, especially those with children.

Key points:

• It is a refundable tax credit, which means:
  • If your credit is larger than the tax you owe, you may get the difference as a refund.
• It is claimed on your federal income tax return (Form 1040 series).
• Many states also have their own EITC or similar credits that piggyback on the federal rules. These are typically claimed on your state tax return.

Self‑employed and gig workers can qualify, but the rules can feel more complex because you must report business income and expenses.

Can Self‑Employed and Gig Workers Qualify for the EITC?

Yes. Self‑employed individuals and gig workers can qualify for the EITC if they meet the income and other requirements.

You might be considered self‑employed or a gig worker if you:

• Drive for rideshare or delivery apps
• Do freelance work (writing, design, consulting, etc.)
• Sell goods online or at markets as an independent seller
• Do on‑call work via apps (handyman services, cleaning, pet sitting)
• Run your own small business, even part‑time

For EITC purposes, your self‑employment net earnings count as earned income, just like wages.

General EITC Eligibility: The Basics

To claim the EITC, you typically must:

• Have earned income from working (wages, tips, or self‑employment)
• Have Social Security numbers valid for employment for you (and your spouse and qualifying children, if you are claiming them)
• File a tax return (even if you are not otherwise required to file)
• Meet income limits (these change each year and depend on:
  • Filing status (single, married filing jointly, etc.)
  • Number of qualifying children, if any
• Not file as Married Filing Separately
• Not be the qualifying child of someone else
• Meet age and residency rules (for workers without children, there are minimum age ranges and other conditions)

The exact income limits and credit amounts change each year. You can usually find the current figures on the Internal Revenue Service (IRS) website or in official IRS publications.

What Counts as “Earned Income” for Self‑Employed and Gig Workers?

For EITC, earned income includes:

• Net earnings from self‑employment (profit from your business after expenses)
• Wages, salaries, and tips reported on a W‑2 (if you also have a regular job)
• Union strike benefits
• Certain disability payments if you retired on disability

For self‑employed and gig workers, the most important figure is usually your net profit from your business or side work, not just your gross payment amounts.

Typically:

• You report your income and expenses on Schedule C (Profit or Loss from Business) or a similar attachment.
• Your net profit (or a portion of it) flows onto Schedule SE (Self‑Employment Tax) and then onto your main federal return (Form 1040).
• That net profit is what is treated as earned income for EITC purposes.

If you have a year with no profit (or a loss), your EITC may be reduced or you may not qualify, even if you received large gross payments, because the credit is based on net earnings.

Special EITC Issues for Self‑Employed and Gig Workers

Self‑employed workers often run into a few recurring issues when claiming the EITC.

1. Accurate Income Reporting

You must report all income from your work, even if:

• You did not receive a 1099 form
• You were paid in cash
• Payments came through multiple apps or platforms

The IRS generally expects your total self‑employment income to be reported, not just what appears on a form.

2. Business Expenses and Net Profit

You may subtract ordinary and necessary business expenses before calculating your net income. This lowers:

• Your taxable income
• Your self‑employment tax
• But it can also reduce your EITC if the net profit becomes too low.

Common expenses gig and self‑employed workers might track:

• Mileage or vehicle expenses related to business
• Supplies and tools
• Phone and internet (business portion)
• Advertising or platform fees
• Home office expenses (if you qualify under IRS rules)

The goal is to report accurate, honest income — neither overstating nor understating.

3. Self‑Employment Tax and the EITC

Self‑employed workers usually pay both:

• Income tax, and
• Self‑employment tax (Social Security and Medicare)

EITC can help offset the overall tax burden. It may increase your refund or reduce what you owe.

Typical Documents to Gather as a Self‑Employed or Gig Worker

Before you start your return or visit a tax preparer/assistance program, it helps to gather:

Income records:

• Form 1099‑NEC, 1099‑K, or other 1099 forms from platforms or clients
• Bank statements showing deposits from gig platforms or customers
• Records of cash payments received
• Any in‑app earnings statements (weekly/monthly summaries from rideshare, delivery, or gig apps)

Expense records:

• Receipts for supplies, equipment, tools
• Mileage logs or vehicle expense records
• Phone and internet bills (with notes on business use)
• Records of platform/service fees and commissions
• Rent or home office expense records (if applicable)

Personal and family info:

• Social Security numbers or ITINs for you, your spouse, and any children
• Birth certificates or school/medical records to help show relationship and residency for qualifying children (if needed)
• Prior‑year tax return (if available)

Having these documents organized can make it easier for an official preparer (or you, if you file yourself) to correctly calculate both self‑employment income and the EITC.

EITC With and Without Qualifying Children

The EITC is typically larger for workers with qualifying children.

Who is a “Qualifying Child” for EITC?

To count as a qualifying child for EITC, a child generally must:

• Be your son, daughter, stepchild, foster child, grandchild, or certain other relatives
• Live with you in the United States for more than half the year
• Be under a certain age (or meet disability criteria)
• Have a valid Social Security number
• Not file a joint return with a spouse (with limited exceptions)

If you are self‑employed and supporting children, the EITC may be one of the most significant credits on your return.

EITC for Workers Without Children

Self‑employed and gig workers without children may still qualify, but:

• The income limits are lower
• The credit amount is generally smaller
• You must meet specific age and other requirements listed by the IRS

You can check your potential eligibility with the IRS’s official EITC assistant tool or by speaking with a certified tax preparer.

Comparing EITC Considerations: W‑2 vs. Self‑Employed Workers

Below is a simple comparison to highlight key differences that often affect gig workers and self‑employed individuals.

How to Claim the EITC as a Self‑Employed or Gig Worker

You cannot claim EITC through HowToGetAssistance.org. You typically claim it as part of your federal income tax return.

Here’s how it usually works:

1. Gather Your Records

Collect:

• Income documents (1099s, bank statements, in‑app reports)
• Expense receipts and logs
• Personal and family information, including Social Security numbers

2. Decide How You Will File

Common options include:

• Filing yourself using tax software or IRS forms
• Going to a paid tax preparer
• Using a free tax preparation program, if you qualify

Many communities have IRS‑sponsored Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) sites, which may assist with:

• EITC eligibility
• Self‑employment income reporting (to the extent they are trained for it)

To find an official VITA/TCE site, you can contact:

• The IRS directly by phone
• 211 (in many areas) to ask about local free tax preparation programs
• Local community organizations, libraries, or nonprofit agencies that host tax clinics

When you use any service, confirm that it is an official or reputable tax assistance provider, not a scam.

3. Complete the Required Forms

For self‑employed and gig workers, this typically involves:

• Form 1040 or 1040‑SR (main federal return)
• Schedule C (to report self‑employment income and expenses)
• Schedule SE (to calculate self‑employment tax)
• EITC‑related worksheets or forms required for that tax year
• Schedule EIC, if you are claiming qualifying children (when required by the IRS for that year)

Tax software and trained preparers usually include these automatically when they see self‑employment income.

4. File Your Return Through an Official Channel

You can usually submit your return:

• Electronically, using trusted tax software or through an authorized e‑file provider
• By mail, using the correct IRS mailing address for your location

For state EITC or similar credits, you usually claim them on your state tax return, often by checking a box or completing a related schedule based on your federal EITC.

What Happens After You Claim the EITC?

Once your tax return is filed:

• The IRS processes your return
• If you qualify for EITC, it is included as part of:
  • Your refund, or
  • A reduction in the tax you owe

For returns that claim EITC, particularly with self‑employment income, the IRS may:

• Take extra time to review the return
• Request additional documentation if something appears incorrect or incomplete
• Adjust or deny the credit if they find problems

If the IRS needs information, they typically send an official letter or notice by mail. Official IRS letters:

• Use IRS logos and letterhead
• Include a notice number and clear instructions for responding

If you receive a communication and are unsure if it is real, you can:

• Call the IRS directly using the phone number listed on the official IRS website (not just the one in the letter)
• Ask a trusted tax assistance organization to help you review the notice

Common Reasons EITC Claims Get Delayed or Denied for Gig/Self‑Employed Workers

Self‑employed taxpayers face some frequent trouble spots:

• Unreported income
  • Not including all cash or 1099 income.
• Very low or very high expenses
  • Claiming no expenses when business obviously has costs, or
  • Claiming unusually large expenses that greatly reduce net income.
• Inconsistent information
  • Amounts on your return don’t match 1099s or other records the IRS has.
• Missing or incorrect Social Security numbers
  • For you, your spouse, or your children.
• Qualifying child issues
  • More than one person claiming the same child.
  • Child doesn’t meet residency or relationship rules.
• Prior EITC errors or bans
  • If you were previously denied EITC due to an error or fraud finding, there may be extra requirements or bans for future claims.

If your EITC is partially or fully denied, the IRS usually sends a notice explaining why and what you can do next.

If Your EITC Claim Is Questioned or Denied

If you receive an IRS notice about your EITC:

1. Read the letter carefully.

   • It should explain what the IRS questions (income, qualifying children, etc.).

2. Gather supporting documents.
   Depending on the issue, you may need:

   • Proof of income (1099s, bank statements, in‑app reports, invoices)
   • Proof of business expenses (receipts, mileage logs)
   • Proof that your children lived with you (school records, medical records, lease documents, etc.)

3. Respond by the deadline.

   • Letters often give a specific date by which you must reply or appeal.
   • You can typically respond by mail, fax (if allowed), or sometimes electronically.

4. Seek help if needed.
   You may contact:

   • A VITA or TCE site (for guidance)
   • A qualified tax professional
   • In some situations, a Low‑Income Taxpayer Clinic (LITC) in your area, which may offer free or low‑cost representation in disputes with the IRS

Be sure you are working with legitimate, trusted organizations. You can usually confirm them via official IRS listings or community resource directories.

How to Tell If You’re Using an Official or Trusted Channel

When dealing with EITC, self‑employment taxes, or any refunds, being cautious helps you avoid scams.

Here are practical tips:

• Do not share personal information (Social Security number, bank details) unless you are certain you are dealing with:
  • The IRS,
  • A state tax agency, or
  • A reputable, recognized tax service.
• Verify phone numbers and addresses using:
  • The IRS’s official website
  • Your state’s official tax agency site
  • Official government directories
    (avoid using only links from emails or texts).
• Be wary of:
  • Anyone guaranteeing a large EITC refund without reviewing your records
  • Preparers who base their fee on a percentage of your refund
  • Requests for you to sign a blank or incomplete return

If something feels off, you can:

• Contact the IRS directly using publicly listed phone numbers
• Call 211 in many areas to ask for help finding legitimate tax assistance

What If You Don’t Qualify for EITC?

If your income is too high, your situation doesn’t fit the EITC rules, or you are otherwise ineligible, you may still have options:

• Other tax credits
  • Child Tax Credit
  • Child and Dependent Care Credit
  • Education credits (if you or a dependent are in school)
• State or local programs
  • Some states offer their own refundable credits or benefits for low‑income workers or families.
• Non‑tax assistance programs
  • Programs such as SNAP, Medicaid, housing assistance, or utility assistance are administered separately through:
    • State or county human services departments
    • Local housing authorities
    • Official benefits portals

To explore non‑tax assistance, you can usually:

• Contact your state or county human services agency
• Call 211 to ask about local programs and how to reach official offices
• Visit local community nonprofits that help people connect with benefits

Key Takeaways for Self‑Employed and Gig Workers

• Yes, you may qualify. Self‑employment and gig income can count as earned income for EITC.
• Net profit matters. The EITC is based on your net earnings after expenses, not just gross payments.
• Good records help. Keep track of all income and expenses, and gather documents before filing.
• You must file a tax return. EITC is typically claimed on your federal tax return, not through any separate application.
• Use official and reputable help. To reduce errors and avoid scams, rely on:
  • Official IRS resources
  • VITA/TCE sites
  • State tax agencies
  • Qualified, trustworthy tax preparers

HowToGetAssistance.org cannot file your taxes or claim the EITC for you, but understanding how the credit works for self‑employed and gig workers can help you ask better questions, gather the right documents, and work more confidently with official tax channels.