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 is a child, grandchild, or foster child who is either under age 19, under age 24 and a student, or disabled as of December 31, 2002. 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 $34,178 in 2002.

• You earn more than $2,550 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:

• You (or your spouse, if married) were at least age 25 but not over age 64 as of December 31, 2002.

• You (and your spouse, if married) lived in the United States at least half of 2002.

• You (and your spouse, if married) earned $12,060 or less in 2002.

The maximum earned income credit for 2002 is $4,140 and is available to taxpayers who earn $10,350 - $13,520 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.