What is Earned income credit (EIC)?
In short
The earned income credit (EIC) is a refundable credit for low- and moderate-income workers, based on earned income, filing status and the number of qualifying children.
Key takeaways
- It is refundable, so it can produce a refund even when no tax is owed.
- Investment income above an indexed limit disqualifies the taxpayer.
- Married taxpayers filing separately generally can't claim it.
Where it's tested
REG: Filing Status, Credits & Alternative Minimum Tax — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
An unmarried taxpayer pays more than half the cost of maintaining a separate household that is the principal residence of the taxpayer's dependent mother. The mother does not live with the taxpayer. What filing status may the taxpayer use?