Earned Income Credit
The earned income credit (EIC) is a special credit for certain persons who work. The credit reduces the amount of tax you owe (if any). It may also give you a refund.
Caution: If you claim the EIC and it is later disallowed, you may have to complete an additional form if you want to claim the credit in a following year. See chapter 5 in Publication 596 for more information, including how to claim the EIC after disallowance.
Persons With a Qualifying Child. If you have a qualifying child, you must meet all the following rules to claim the earned income credit.
1) You must have earned income during 2003.
2)Your earned income and adjusted gross income (AGI) must each be less than:
- $33,692 ($34,692 for married filing jointly) if you have two or more qualifying children, or
- $29,666 ($30,666 for married filing jointly) if you have one qualifying child.
4)You (or your spouse, if filing a joint return) cannot be a qualifying child of another person.
5)Your qualifying child cannot be used by more than one person to claim the credit. See Qualifying child of more than one person, later.
6)You cannot file Form 2555, Foreign Earned Income, or Form 2555–EZ, Foreign Earned Income Exclusion, to exclude income earned in foreign countries, or to deduct or exclude a foreign housing amount. See Publication 54 for more information about these forms.
7)You must be a U.S. citizen or resident all year unless:
- You are married to a U.S. citizen or a resident alien, and
- You choose to be treated as a resident alien for the entire year. If you need more information about making this choice, see Resident Aliens, earlier.
9)You must have a valid social security number for yourself, your spouse (if filing a joint return), and any qualifying child.
Qualifying child of more than one person. Sometimes, a child meets the rules to be a qualifying child of more than one person. However, only one person can treat that child as a qualifying child and claim the EIC using that child. The paragraphs that follow will help you decide who can claim the EIC when more than one person has the same qualifying child.
You can choose which person will claim the EIC. If you and someone else have the same qualifying child, you and the other person(s) can decide who will claim the credit using that qualifying child. However, if you and the other person(s) cannot agree and more than one person claims the credit using the same child, the tie-breaker rule (explained in the next paragraph) applies. If the other person is your spouse and you file a joint return, this rule does not apply.
Tie-breaker rule. Under the tie-breaker rule, the child will be treated as a qualifying child only by:
1)The parent, if only one of the persons is the child’s parent.
2)The parent with whom the child lived for the longest period of time during the year, if two of the persons are parents of the child and they do not file a joint return together.
3)The parent with the highest AGI if the child lived with each parent for the same amount of time during the tax year, and they do not file a joint return together.
4)The person with the highest AGI, if none of the persons is the child’s parent.
Adjusted gross income (AGI). AGI is the amount on line 35 of Form 1040, or line 21 of Form 1040A.
If another person claims the EIC using this child. If your qualifying child is treated under this rule as the qualifying child of another person for 2003, you cannot take the EIC using this qualifying child.
See Rule 9 in Publication 596 for more help in determining whether you can claim the EIC when you and someone else have the same qualifying child.
Qualifying child of another person. If you are a qualifying child of another person, you cannot claim the credit - no matter how many qualifying children you have.
