Earned Income Credit

The earned income credit is a credit available to working Americans. It is calculated based on your income and the number of so-called "qualifying children" you support. A qualifying child meets several criteria - see the "Child" help topic in the Personal Information window. We estimate your earned income credit based on the information you enter about your dependents and your income.

The credit is not available if any of the following are true:

• You are married filing a separate return.

• You earned more than $39,783 in 2007.

• You earn more than $2,900 in investment income: interest, dividends, capital gains, and the like.

• You are the qualifying child of another person.

If you do not have any qualifying children, you must meet all these conditions to qualify for the earned income credit:

• Either you or your spouse must be at least age 25 but under age 65 at the end of 2007.

• You (and your spouse, if married) lived in the United States at least half of 2007.

• You (and your spouse, if married) earned $14,590 or less in 2007.

The maximum earned income credit for 2007 is $4,716 and is available to taxpayers who file jointly and earn $11,790-$17,390 and have two or more qualifying children.

The earned income credit is treated on your tax return as a tax payment. This means that if your earned income credit is larger than the amount of tax you owe, you receive the excess as a tax refund.