IRS Will Figure the EIC for You

Tip:If you want the IRS to figure your income tax, see Publication 967, The IRS Will Figure Your Tax. The IRS will figure your EIC for you if you follow the instructions in Figure 3 below. If you want to figure the credit yourself, use EIC Worksheet A or B, whichever applies.

If you have a qualifying child, complete and attach Schedule EIC (discussed in detail on page 27).

Figure 3. Earned Income Credit On Your Tax Return

Earned Income Credit On Your Tax Return

Please do not ask the IRS to figure your EIC unless you are eligible for it. To be eligible, you must meet the rules in this chapter as well as the rules in chapter 1 and either chapter 2 or chapter 3, whichever applies to you. If your credit was reduced or disallowed for any year after 1996, the rules in chapter 5 may apply as well.

You cannot report advance payments of EIC on Form 1040EZ. If you received advance payments of EIC during 2001, you must file Form 1040 or Form 1040A.

Note. If you do not have a qualifying child, STOP here and complete your Form 1040, Form 1040A, or Form 1040EZ and mail it to the IRS. If you do have a qualifying child, see Schedule EIC, later.

Special instructions for clergy, prison inmates, deferred compensation plans, and Coverdell ESAs. Use the following special instructions if one of the following situations applies to you.

Minister or member of a religious order. If you are filing Schedule SE and line 2 of that schedule includes an amount that is also included on line 7 (Form 1040), print "Clergy" directly to the right of line 61a (Form 1040). Also show the amount included on both lines (for example, "Clergy $800"). If you received a housing allowance or were provided housing and you were required to include the allowance or the rental value of the parsonage on Schedule SE, line 2, do not include it as nontaxable earned income on line 61b (Form 1040).

Inmates. If you were an inmate in a penal institution and the total on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ) includes an amount paid to you for work you performed while an inmate, print "PRI" and the amount paid on the dotted line next to line 7 (Form 1040), in the space to the left of line 7 (Form 1040A), or in the space to the right of the words "W-2 form(s)" on line 1 (Form 1040EZ).

Deferred compensation plans. If you received a pension or annuity from a nonqualified deferred compensation plan or a section 457 plan, put "DFC" and the amount subtracted on the dotted line next to line 7 (Form 1040). This amount may be reported in box 11 of your Form W-2. If you received such an amount but box 11 is blank, contact your employer for the amount of the pension or annuity.

Coverdell ESAs. If you received a Coverdell ESA (Education Savings Account) distribution that was not fully taxable, write "ESA "and the amount of the distribution that was nontaxable directly to the right of line 61a (Form 1040) or line 39a (Form 1040A).

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