Support CenterWhat are the rules for a Taxpayer to qualify for Earned Income Tax Credit (EITC) in an individual return?
The earned income credit (EIC) is a tax credit for certain people who work and have earned income under a certain amount. The IRS has rules to qualify a taxpayer for earned income credit. If the rules are not met, earned income credit will not populate on your tax return.
Taxpayer(s) adjusted gross income (AGI) must be below a certain amount (Review the IRS1040 instructions or Publication 596 instructions for the specific tax yearto determine the income limitation and if the taxpayer qualify for earned income credit)
Earned income includes all the taxable income and wages you get from working for someone else, yourself or from a business or farm you own.
Types of Earned Income
Wages, salary or tips where federal income taxes are withheld on Form W-2, box 1
Income from a job where your employer didnt withhold tax (such as gig economy work) including:
Drivinga car for booked rides or deliveries
Running errands or doing tasks
Selling goods online
Providing creative or professional services
Providing other temporary, on-demand or freelance work
Money made from self-employment, including if you:
Own or operate a business or farm
Are aminister or member of a religious order
Are astatutory employeeand have income
Benefits from a union strike
Certain disability benefits you got before you were the minimum retirement age
Nontaxable Combat Pay (Form W-2,box 12 with code Q)
If you claim nontaxable combat pay as earned income, it may increase or decrease the amount of your EITC. For more information, seePublication 3, Armed Forces' Tax Guide.
Earned incomedoes notinclude:
Pay you got for work when you were an inmate in a penal institution
Interest and dividends
Pensions or annuities
Social Security
Unemployment benefits
Alimony
Child support
Taxpayer must have a social security number (SSN) valid for employment (if you're filing a joint return, your spouse also must have an SSN valid for employment).
Taxpayer or spouse with an Individual Taxpayer Identification Number(ITIN)filercannot claim theEarned IncomeTax Credit, which specifically requires a Social Security number. Any children using anITINinstead of a Social Security numberwill not qualify the taxpayers for earned income credit
Taxpayer will not qualify if filing status is married filing separately
Must Be a U.S. citizen or resident alien all year, or a nonresident alien married to a U.S. citizen or resident alien and filing a joint return
Taxpayer cannot file Form 2555(related to foreign earned income)
Taxpayer cannot have investment income over $11,000.00 (Effective 2023 Tax Year)
Taxpayer cannot be a qualifying child of another person (if you're filing a joint return, your spouse also cannot be a qualifying child of another person)
If taxpayer has a qualifying child, the child must meet the age, relationship, residency, and joint return tests, and isn't treated as the qualifying child of another person.
Taxpayer must:
be age 25 but under 65 at the end of the year
not qualify as a dependent of another person, and
live in the United States for more than half of the year
Quick Guide Below for EITC rules:
Additional Information
Para obtener la versin en espaol de este artculo de Knowledge Base, haga clic aqu:Cules son las reglas para que un contribuyente califique para Earned Income Tax Credit (EITC) en una Declaracin de Impuestos individual?
Tags: federal,form