Earned Income Credit

The Earned Income Credit (EIC) is a refundable credit. This credit is designed for certain people who work and have less than $52,427 in earned income. The IRS aggressively pursues individuals who attempt to take this credit when they are not qualified for it. If you have a qualifying child, the amount of the credit will be greater. The amount you can receive depends on your level of income and the number of qualifying children. It can be as high as $6,143.

There are four sets of rules for the EIC.

The first set, Part A rules, apply to everyone.

1. Your adjusted gross income (AGI) must be less than
  • $46,997 ($52,427 if married filing jointly) with more than 3 qualifying children
  • $43,756 ($49,186 if married filing jointly) with 2 qualifying children
  • $38,511 ($43,941 if married filing jointly) with 1 qualifying child
  • $14,590 ($20,020 if married filing jointly) with no qualifying child.

2. You must have a valid social security number.
3. You filing status cannot be married filing separately.
4. You must be a citizen of the United States or resident alien for the entire year.
5. You cannot file Form 2555 or Form 2555-EZ.
6. Your investment income must be $3,350 or less.
7. You must have earned income. Earned income is wages, salaries, or earnings from self-employment.

Part B rules apply only if you have a qualifying child.

8. Your child must meet the relationship, age, and residency tests
  • Relationship test - A child must be your son, daughter, stepchild, eligible foster child or a descendent of any of them OR your brother, sister, half brother or sister, stepbrother or sister, or a descendent of any of them.
  • Age test - A child must be under age 19 at the end of the year; a full time student under at 24 at the end of the year; or permanently and totally disabled at any time during the year.
  • Residency test - A child must have lived with you in the United States for more than half of the year.

9. Your qualifying child cannot be used by more than one person to claim the EIC.
10. You cannot be the qualifying child of another person.

Part C rules apply only if you do not have a qualifying child.

11. You must be at least age 25 but under age 65.
12. You cannot be the dependent of another person.
13. You cannot be the qualifying child of another person.
14. You must have lived in the United States for more than half the year.

The Part D rule applies to everyone.

15. Your earned income must be less than:
  • $46,997 ($52,427 if married filing jointly) with more than 3 qualifying children
  • $43,756 ($49,186 if married filing jointly) with 2 qualifying children
  • $38,511 ($43,941 if married filing jointly) with 1 qualifying child
  • $14,590 ($20,020 if married filing jointly) with no qualifying child.

If you have a qualifying child for the Earned Income Credit, you'll need to file Schedule EIC.

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