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Ask A CPA - Earned Income Credit

Earned Income Credit - General Eligibility

Rules for every taxpayer: Must have earned income, such as wages, tips or the income from running a business or farm. Most other types of income, such as retirement pensions, though usually taxable, do not count as earned income. Must have a Social Security number that is valid for employment for self, spouse and any qualifying children. A person can get the credit even with a small amount of investment income, such as interest from a bank account. However, the amount of investment income is limited to $3,400. The filing status used must be single, head of household, married filing jointly or qualifying widow or widower. A taxpayer who files as married filing separately cannot get the credit. Generally, must be either a U.S. citizen or resident alien. Cannot be a qualifying child of another person. Cannot file Form 2555 or Form 2555-EZ.

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