The credit union participates with other parish ministries in an outreach effort to increase awareness of this Federal Tax benefit. The Earned Income Credit, or EIC, is a refundable credit for workers who meet certain requirements and file a tax return. Persons with or without a qualifying child may claim the EIC. For tax year 2006, the maximum credit is $2,747 for persons with one qualifying child, and $4,536 for persons with two or more qualifying children. The maximum credit is $412 for persons without a qualifying child.
This credit is called the Earned Income Credit because, to qualify, you must work and have earned income. If you are married and file a joint return, you meet this rule if at least one spouse works and has earned income.
Earned income includes all the taxable income you get from working as an employee, including, wages, salaries, tips, and other employee compensation. Earned income also includes net earnings from self-employment.
Earned income does not include nontaxable earned income. Unemployment compensation and pensions are not earned income.
The rules are complicated, so please check IRS Publication 596 at the IRS web site. The earned income limits for 2006 are $12,120 ($14,120 if married filing jointly) if you do not have a qualifying child; $32,001 ($34,001 if married filing jointly) if you have one qualifying child; $36,348 ($38,348 if married filing jointly) if you have more than one qualifying child.