Earned Income Credit

The Earned Income Credit (EIC) is a tax credit for certain people who work and have earned income below a specific amount. This credit may give you a refund even if you do not owe any tax. In order to claim this credit, you must file an income tax return and qualify by meeting certain rules.

A CREDIT CAN BE AS MUCH AS:

  • $399 for earned income or adjusted gross income ( AGI) less than $11,750 and no children ($13,750 if married filing jointly)
  • $2,662 for earned income or AGI less than $31,030 and one qualifying child ($33,030 if married filing jointly)
  • $4,400 for earned income or AGI less than $35,263 and more than one qualifying child ($37,263 if married filing jointly)


RULES FOR ALL FILERS FOR EIC:

  • AGI must be less than the above mentioned limits
  • You must have a valid social security number
  • Your filing status cannot be married filing separately
  • You must be a U.S. citizen or resident alien all year
  • You cannot file Form 2555 or Form 2555-EZ (relating to foreign income)
  • Your investment income must be $2,700 or less
  • You must have earned income


ADDITIONAL RULES IF YOU HAVE QUALIFYING CHILDREN:

  • Your child must meet the relationship, age and residency tests
  • Your qualifying child cannot be used by more than one person to claim the EIC
  • You cannot be a qualifying child of another person


ADDITIONAL RULES IF YOU DON’T HAVE A QUALIFYING CHILD:

  • You must be at least age 25, but under age 65
  • You cannot be the dependent of another person
  • You cannot be a qualifying child of another person
  • You must have lived in the United States for more than half the year

QUALIFYING CHILD:

A qualifying child is a child who is:

  • Your son, daughter, adopted child (placed for legal adoption), stepchild or a descendant of any of them (for example, your grandchild) or
  • Your brother, sister, stepbrother, stepsister or a descendant of any of them (for example, your niece or nephew), who you cared for as your own child or
  • Your foster child (any child placed with you by an authorized placement agency or by judgment, decree, or other order of any court).
  • and the child was, at the end of the current tax year, under age 19 or under age 24 and a student or permanently and totally disabled at any time during the year, regardless of age
  • and the child lived with you in the United States for more than half of the tax year.


EARNED INCOME FOR PURPOSES OF EARNED INCOME CREDIT INCLUDES:

  • Wages, salaries and tips
  • Gross income received as a statutory employee
  • Taxable long-term disability benefits received before minimum retirement age
  • Net earnings from self-employment
  • Nontaxable combat pay election. You can elect to include nontaxable combat pay in earned income for the purpose of figuring the earned income credit.