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Earned Income Credit

If you have earned income, and have a *modified* AGI of not more than...

  • $10,030 if you have NO qualifying children
  • $26,473 if you have ONE qualifying child
  • $30,095 if you have TWO OR MORE qualifying children

... you may qualify for the Earned Income Credit. This credit is calculated based on the instructions and tables provided in your tax form instructions, and is a refundable credit .. meaning you can receive it back even if you had no taxes withheld and didn't need to file a return! The AGI limits are the same for unmarried individuals or married couples filing jointly; the credit is not available if you are married and filing separately.

A "qualifying child" is generally your son, daughter, grandchild, stepchild or foster child, who was under age 19 at year end (under 24 if a full-time student for at least part of five months of the year). He or she must have lived with you in your home for at least six months of the year, counting temporary absences for school or vacation. If a foster child, he or she must have lived with you all year. A child who is permanently and totally disabled also qualifies, regardless of age.

Note that the same child can be "qualifying" for more than one person. In that case, only the taxpayer with the higher AGI can even attempt to claim the Earned Income Credit based on that child. The lower income parent isn't eligible.

*Modified* AGI, for the purposes of EIC, is the AGI shown on the return, increased by certain unallowed losses. Starting in 1998, modified AGI will also include non-taxable interest and non-taxable pensions. See the Form 1040, Schedule EIC instructions for details, or IRS Publication 596 (See instructions at bottom for ordering.)

Eligibility for the EIC can be lost if the taxpayer has more than $2,250 in "disqualified income," defined as interest, dividends, net capital gains, and net income from rents and royalties.

There are many additional limitations and calculations that could affect your eligibility for this credit. For complete information, see the instructions in your tax form booklet, or obtain IRS Publication 596 (which can be downloaded from the IRS web site, accessible off our Links Page or ordered by calling 1-800-TAX-FORM.)



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We do not offer legal advice. All information provided on this website is for informational purposes only and is not a substitute for proper legal advice. If you have legal questions, we recommend that you seek the advice of legal professionals.

Tax Disclaimer: To ensure compliance with IRS Rules, any U.S. federal tax advice provided in this communication is not intended or written to be used, and it cannot be used by the recipient or any other taxpayer (i) for the purpose of avoiding tax penalties that may be imposed on the recipient or any other taxpayer under the Internal Revenue Code, or (ii) in promoting, marketing or recommending to another party a partnership or other entity, investment plan, arrangement or other transaction addressed herein.

Copyright 2017 Wink Tax Services / Wink Inc.
Last modified: January 30, 2017