The tests to determine whether you qualify for the EIC depend on whether you have 1 or more qualifying children. However, everyone must meet 8 tests:
- You must file a tax return, and you can't be Married Filing Separately.
- You must have a valid social security number.
- You must be a U.S. citizen or resident alien for the entire year.
- You must have earned income (income for which you performed services).
- If you have investments, your income from them can't be more than $3,100 in 2010.
- You can't file Form 2555 or 2555-EZ to exclude foreign source income.
- Your earned income and adjusted gross income in 2010 must be less than $13,460 if you have no qualifying children ($18,470 Married Filing Jointly), $35,535 if you have 1 qualifying child ($40,545 Married Filing Jointly), $40,363 if you have 2 qualifying children ($45,373 Married Filing Jointly), or $43,352 if you have more than 2 qualifying children ($48,362 Married Filing Jointly).
- You (or your spouse) can't be the qualifying child of another person.
If you have at least one qualifying child you can receive part of the EIC in each paycheck, with a maximum of $1,830 for tax year 2010. A qualifying child must pass the age, residency and relationship tests, and must have a social security number that’s valid for employment in the U.S.:
- Relationship: The child must be your son or daughter, grandchild, adopted child, stepchild or eligible foster child. (To be an eligible foster child, the child must have been placed with you by a qualified placement agency, or by judgment, decree, or other order of any court of competent jurisdiction.) The child does not have to be eligible to be your dependent unless the child is married. (A married child must be eligible to be your dependent unless you're divorced or separated and have given up the right to claim the child as a dependent to the other parent.)
- Age: The child must be younger than 19 at the end of the year unless the child is a full-time student or permanently and totally disabled. Full-time students for at least 5 months of the year must be younger than 24. Permanently and totally disabled individuals may be any age.
- Residency: The child must have lived with you in your U.S. home for more than 6 months of the year. (Members of the U.S. Armed Forces who are out of the country on extended active duty are considered to be living in the U.S.) Time away for temporary absences (for example, attending college) counts as time living with you. A child who was born or died during the year meets the residency test as long as he or she lived with you the entire time he or she was alive. Also, the child must have a social security number that is valid for employment in the U.S.
Claiming the EIC without a Qualifying Child
If you meet the requirements above, but don't have a child who meets the relationship, age and residency tests, you must meet all of the following conditions to claim the EIC:
- You must be at least 25, and younger than 65, at the end of the year.
- You don't qualify as a dependent of another person.
- You must have lived in the U.S. for more than half the year.
If you have at least 1 qualifying child and expect to qualify for the EIC, the Advance EIC allows you to receive part of the credit in each paycheck during the year you qualify for the credit. The maximum Advance EIC an employer can give you throughout the year is $1,830 for tax year 2010.
Still Need Help Understanding EIC?
The IRS created a user-friendly tool to make determining eligibility for the EIC much easier. The EIC Assistant is available in both English and Spanish.