The earned income credit is a special credit for certain people who work. The credit reduces the amount of income tax you owe (if any) and is intended to offset some of the increases in living expenses and social security taxes.

How do you get the earned income credit? To get the earned income credit, you must:

1. Qualify by meeting certain rules, and
2. File a tax return, even if you:
   1. Do not owe any tax,
   2. Did not earn enough money to file a return, or
   3. Did not have income taxes withheld from your pay.

When you complete your return, you can figure your earned income credit by using a worksheet in the instructions for the return. 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 credit,
• How to figure the credit, and
• How to get advance payment of the credit in your paycheck.

To learn about the rules you must meet, first read Do You Qualify for the Credit? later.

Earned income credit disallowed. If your credit has been disallowed because of deficiency procedures, you will have to file Form 8862. See Publication 596 for more information.

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