The earned income credit (EIC) is a tax credit for certain people who work and have earned income under $32,121. A tax credit usually means more
money in your pocket. It reduces the amount of tax you owe. The EIC may also give you a refund.
How do you get the earned income credit?
To claim the EIC, you must:
- Qualify by meeting certain rules, and
- File a tax return, even if you:
- Do not owe any tax,
- Did not earn enough money to file a return, or
- Did not have income taxes withheld from your pay.
When you complete your return, you can figure your EIC by using a worksheet in the instructions for Form 1040, Form 1040A, or Form 1040EZ. Or, if
you prefer, you can let the IRS figure the credit for you.
How will this chapter help you?
This chapter will explain the following:
- What rules you must meet to qualify for the EIC,
- How to figure the EIC, and
- How to get advance payment of the EIC in your paycheck.
To learn about the rules you must meet, first read Do You Qualify for the Credit, later.
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