The earned income tax credit (EIC) is a refundable tax credit that reduces or eliminates the tax paid by low-income workers.

• You must have a valid Social Security Number (SSN).
  • An Individual Taxpayer Identification Number (ITIN) is not sufficient.
  • Your SSN card must not have "Not valid for employment" on it.
• Your filing status must be single, head of household, qualifying widow(er), or married filing jointly.
• You must be a U.S. citizen living in the U.S. more than half the year, or a resident alien for the entire year.
• You cannot have foreign earned income.
• Your investment income must be less than $2,801.
• Your adjusted gross income must be less than:
  • $36,348 ($38,348 if married filing jointly) if you have two or more qualifying children
  • $32,001 ($34,001 if married filing jointly) if you have one qualifying child
  • $12,120 ($14,120 if married filing jointly) if you do not have any qualifying children
• You must have earned income.
• You must not be the qualifying child of another person.
• You must not be the dependent of another person.
• You must be at least age 25, but under age 65.

• The child must have a valid Social Security Number (SSN).
• The child's relationship to you must be any of the following:
  • Son or daughter
  • Stepchild
  • Eligible foster child
  • Sibling, half-sibling, or step-sibling
  • A descendant of any of the above, e.g, your grandchild
• The child must be one of the following:
  • Under 19 at the end of the current tax year
  • Under 24 at the end of the current tax year and a student
  • Permanently and totally disabled at anytime during the year, regardless of age
• The child must have lived with you in the United States for more than half of the current tax year. A child is considered to have lived with you if the child was born or died in the current tax year and lived with you the entire time he or she was alive. Temporary absences, including school, vacation, medical care, military service, or detention in a juvenile facility, count as time lived with you.
• The child cannot be used by anyone else to claim EIC.
• It is possible that one child might be claimed by two or more persons in one calendar year. In this event, the child will be the qualifying child of the parents first, and then the taxpayer with the highest adjusted gross income (AGI). If both of the child's parents claim the credit, the parent with whom the child resides the longest may claim the credit. If the child resides with both parents an equal amount of time, the parent with the highest AGI will claim the child for EIC.

• Wages
• Salaries
• Tips
• Other taxable employee compensation
• Net earnings from self-employment
• Disability pay reported as wages
• Parsonage allowances
• Meals and lodging furnished for the convenience of the employer
• Voluntary salary deferrals
• Military pay earned in a combat zone
• Strike pay paid by a union
• Statutory employee wages

If you expect to be eligible for EIC for the current year and have a qualifying child, it is possible to receive advance payments of EIC in your paycheck instead of getting all of the payment at once when you file your tax return for this year. Advance EIC payments are reported in box 9 of Form W-2.  If you receive advance payments, you must file a tax return for the year in which you received the payments.

Not all taxpayers who have received EIC on their tax return qualify for advance payments:

• You must expect to have a qualifying child.
• You must expect your AGI and earned income will be less than $33,241 ($35,241 for married filing joint).
• You must expect to be eligible for EIC based on the rules of the credit.

To begin receiving advance payments, you must give your employer a completed Form W-5 for this year.

• Fill out Form W-5.
• Give it to only one employer, even if you have multiple employers at one time.
• If your situtation changes after you give your employer the completed Form W-5, you must fill out a new form reflecting the changes and and give it to your employer.
• You can give your employer a Form W-5 even if your spouse has given one to his/her employer.

Disallowance of EIC is usually due to math or clerical errors, reckless or intentional disregard of EIC rules, and fraud. If you have been disallowed due to any reason otehr than a math or clerical error, you must file Form 8862 before claiming EIC again.

If you have been disallowed due to math or clerical errors for any year after 1996, it is not necessary to file Form 8862 with your tax return.

If you have been disallowed due to reckless or intentional disregard of EIC rules, you cannot claim EIC for two years after disallowance. If your EIC has not been reduced or disallowed again for any reason other than math or clerical errors, and you have previously filed Form 8862 since disallowance, you do not need to file Form 8862 again.

If you have been disallowed due to fraud, you cannot claim EIC for ten years after final determination that your EIC claim was due to fraud.

For more information see IRS Publication 596.