Tax Guide for Earned Income Credit

  • The Earned Income Credit (EIC) is a tax credit for certain people who earned income. This “refundable” credit may give you a refund even if you had no tax withholding. In order to claim this credit, you must file an income tax return and meet certain rules. 

    A CREDIT CAN BE AS MUCH AS:
    • $487 for earned income and adjusted gross income (AGI) less than $14,340 with no children ($19,680 if married filing jointly)
    • $3,250 for earned income and AGI less than $37,870 and one qualifying child ($43,210 if married filing jointly)
    • $5,372 for earned income and AGI less than $43,038 and two qualifying children ($48,378 if married filing jointly).
    • $6,044 for earned income and AGI less than $46,227 and three or more qualifying children ($51,567 if married filing jointly).
    RULES FOR ALL FILERS FOR EIC:
    • You must have earned income (wages or self-employment income)
    • You (AND your spouse AND any qualifying child) 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 (which excludes foreign earned income)
    • Your investment income must be $3,300 or less
    ADDITIONAL RULES IF YOU HAVE QUALIFYING CHILDREN:
    • Your child must meet the relationship, age and residency tests, and be younger than you
    • 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, at the end of 2013; if filing MFJ, either you or your spouse must be at least age 25, but under 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:

     For EIC purposes a qualifying child must meet the relationship, residency, age and joint return tests. 

    Relationship test: The qualifying child must be your son or daughter (including adopted child, stepchild, or eligible foster child), brother, sister, stepbrother, stepsister, half brother, half sister, or a descendant of one of these. 

    An adopted child includes a child lawfully placed with you for legal adoption even if the adoption is not final. 

    An eligible foster child is any child who is placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. 

    Residency test: The qualifying child must live with you in the U.S. for more than half of the year. A child who was born or died during the year is considered to have lived with you for the entire year if your home was the child’s home for the entire time he or she was alive during the year.  

    Age test: The qualifying child must be under age 19 at the end of the year and younger than you (or your spouse if filing jointly), or a full-time student under age 24 at the end of the year and younger than you (or your spouse if filing jointly), or, if permanently and totally disabled, can be any age. 

    Joint return test: The child cannot file a joint return for the year. An exception applies if your child and his or her spouse file a joint return only to claim a refund of income tax withheld or estimated tax paid.

    EARNED INCOME FOR PURPOSES OF EARNED INCOME CREDIT INCLUDES:
    • Wages, salaries and tips
    • Union strike benefits
    • Taxable long-term disability benefits received before minimum retirement age
    • Net earning from self-employment