How to Figure the Earned Income Tax Credit

The Internal Revenue Service is giving away money. The earned income credit provides low-income working taxpayers with a credit and sometimes a refund. In addition to having a low income, the IRS requires you to be a resident in the United States for more than half the year, not a dependent or a qualifying child of another tax[ayer, be age 25 to 65 if you have no dependent children and you must have earned income with investment income less than $3,100 for the year. If you meet these qualifications and others, complete the forms and calculate your EIC, or earned income credit.

Instructions

1. Complete the top part of IRS Form 1040EZ, 1040A or 1040, whichever is appropriate for your situation. If you are self-employed, you cannot use Form 1040EZ or 1040A.

2. Add and subtract as requested on the form to arrive at the adjusted gross income on Line 4 of Form 1040EZ, Line 22 of Form 1040A and Line 38 of Form 1040. Check to be certain that your adjusted gross income figures qualify you for the earned income credit. A single person can earn $13,440 and qualify without dependent children.

3. Determine if you need to file Schedule EIC. The IRS requires this form to provide names of qualifying children only.

4. Locate the EIC Worksheet A or Worksheet B on the IRS website or on page 35 of IRS Publication 596. Determine which worksheet you need. Use Worksheet B if you have self-employment income. These worksheets are also available in the instruction booklets for the 1040 forms from the IRS.

5. Find the amount of your tax credit, based on your worksheet figures, using the tables in IRS Publication 596 or on the IRS website. Do not file worksheets with your tax return.

6. Enter the amount of earned income credit on Line 64a of Form 1040, Line 41a of Form 1040A or Line 9a of Form 1040EZ.

Tips & Warnings

• Alternatively, you may have the IRS figure the credit for you by writing "EIC" to the left of the line for EIC credit and leaving computation information blank. This includes Lines 71, 72, 73a and 75 on Form 1040; Lines 44, 45, 46a and 48 on Form 1040A and Lines 10, 12a and 13 on Form 1040EZ.

• Some states also offer an EIC for state income taxes.

References

• IRS.gov: Publication 17 -- Your Federal Income Tax
• IRS.gov: Publication 17 -- Earned Income Credit
• IRS.gov: Publication 596 -- Earned Income Credit
• IRS.gov: EITC Home Page -- It's Easier Than Ever to Find Out if You Qualify for EITC