The EIC is surprisingly complex. The IRS publication on the subject, Publication 596, lists 15 bullet points under a table titled “Earned Income Credit in a Nutshell.”
Here’s a very basic overview of the EIC.
You Might Qualify for the EIC if:
- Your income is less than $14,340 (or $19,680 if married) and you have no children
- Your income is less than $37,870 (or 43,210 if married) and you have 1 child
- Your income is less than $43,038 (or $48,378 if married) and you have 2 children
- Your income is less than $46,227 (or $51,567 if married ) and you have 3 or more children
*-These numbers are based on the 2013 EIC.
The amount of credit is based on your “earned income,” which generally means wages and self-employment income.
There is a formula to determine the credit but in practice, everyone uses the chart in Publication 596 to determine the credit amount.