Examples(p248)

The following two comprehensive examples (complete with filled-in forms) may be helpful.

1. John and Janet Smith, a married couple with one qualifying child and using Form 1040A.
2. Kelly Green, age 30, a student, with no qualifying child and using Form 1040EZ.

John and Janet Smith are married and will file a joint return. They have one child, Amy, who is 3 years old. Amy lived with John and Janet for all of 2011. John worked and earned $9,500. Janet worked part of the year and earned $1,500. Their earned income and AGI are $11,000. John and Janet qualify for the earned income credit and fill out the EIC Worksheet and Schedule EIC. The Smiths will attach Schedule EIC to Form 1040A when they send their completed return to the IRS.

They took the following steps to complete Schedule EIC and the EIC Worksheet.

The Smiths complete Schedule EIC because they have a qualifying child. They enter "John and Janet Smith" and John's SSN (the SSN that appears first on their Form 1040A) on the line at the top of Schedule EIC. The Smiths then fill out Qualifying Child Information (lines 1 – 6).

Next, the Smiths will complete the EIC Worksheet to figure their earned income credit.

The Smiths enter $11,000 (their earned income).

The Smiths go to the Earned Income Credit Table in the Form 1040A instructions. The Smiths find their income of $11,000 within the range of $11,000 to $11,050. They follow this line across to the column that describes their filing status and number of children and find $3,094. They enter $3,094 on line 2.

The Smiths enter their AGI of $11,000.

The Smiths check the "Yes" box because lines 1 and 3 are the same ($11,000). They skip line 5 and enter the amount from line 2 ($3,094) on line 6.

The Smiths' EIC is $3,094.

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Kelly Green is age 30 and a full-time student. She lived with her parents in the United States for all of 2011. She had a part-time job and earned $6,240. She earned $20 interest on a savings account. She is not eligible to be claimed as a dependent on her parents' return. Although she lived with her parents, she is not their qualifying child because she does not meet the age test. She does not have any children.

Kelly qualifies for the earned income credit. Kelly will file Form 1040EZ and complete the EIC Worksheet.

Kelly figures the amount of her earned income credit on the EIC Worksheet as follows.

She enters $6,240 (her earned income).

Kelly goes to the Earned Income Credit Table in the forms instruction booklet. She finds her earned income of $6,240 in the range of $6,200 to $6,250. Kelly follows this line across to the column that describes her filing status and finds $464. She enters $464 on line 2.

Kelly enters $6,260 (her AGI).

Kelly checks the "No" box because lines 1 and 3 are not the same.

Kelly checks the "Yes" box because the amount on line 3 ($6,260) is less than $7,500. She leaves line 5 blank and enters the amount from line 2, $464, on line 6.

She enters $464 here and on Form 1040EZ, line 9a. Kelly's earned income credit is $464. taxmap/pub17/p17-185.htm#en_us_publink1000253425

Earned Income Credit (EIC) Worksheet—Lines 8a and 8b   1. Enter your earned income from Step 2 on page 14 1. 6,240     2. Look up the amount on line 1 above in the EIC Table on page 16 to find the credit. Be sure you use the correct column for your filing status (Single or Married filing jointly).       Enter the credit here 2. 464   If line 2 is zero,  You cannot take the credit. Enter "No" in the space to the left of line 8a.     3. Enter the amount from Form 1040EZ, line 4 3. 6,260     4. Are the amounts on lines 3 and 1 the same?           Yes. Skip line 5; enter the amount from line 2 on line 6.           ☑ No. Go to line 5.         5. Is the amount on line 3 less than $7,600 ($12,700 if married filing jointly)?         ☑ Yes. Leave line 5 blank; enter the amount from line 2 on line 6.         No. Look up the amount on line 3 in the EIC Table on page 16 to find the credit. Be sure you use the correct column for your filing status (Single or Married filing jointly).           Enter the credit here 5.       Look at the amounts on lines 5 and 2. Then, enter the smaller amount on line 6.                     6. Earned income credit. Enter this amount on Form 1040EZ, line 8a 6. 464 If your EIC for a year after 1996 was reduced or disallowed, see above to find out if you must file Form 8862 to take the credit for 2011.

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EIC Eligibility Checklist You may claim the EIC if you answer "Yes" to all the following questions.*       Yes No 1. Is your AGI less than: $13,660 ($18,740 for married filing jointly) if you do not have a qualifying child, $36,052 ($41,132 for married filing jointly) if you have one qualifying child, $40,964 ($46,044 for married filing jointly) if you have two qualifying children, or $43,998 ($49,078 for married filing jointly) if you have more than two qualifying children? (See Rule 1.) □ □ 2. Do you, your spouse, and your qualifying child each have a valid SSN? (See Rule 2.) □ □ 3. Is your filing status married filing jointly, head of household, qualifying widow(er), or single? (See Rule 3.) Caution: If you or your spouse is a nonresident alien, answer "Yes" only if your filing status is married filing jointly. (See Rule 4.) □ □ 4. Answer "Yes" if you are not filing Form 2555 or Form 2555-EZ. Otherwise, answer "No." (See Rule 5.) □ □ 5. Is your investment income $3,150 or less? (See Rule 6.) □ □ 6. Is your total earned income at least $1 but less than: $13,660 ($18,740 for married filing jointly) if you do not have a qualifying child, $36,052 ($41,132 for married filing jointly) if you have one qualifying child, $40,964 ($46,044 for married filing jointly) if you have two qualifying children, or $43,998 ($49,078 for married filing jointly) if you have more than two qualifying children? (See Rules 7 and 15.) □ □ 7. Answer "Yes" if you (and your spouse if filing a joint return) are not a qualifying child of another taxpayer. Otherwise, answer "No." (See Rules 10 and 13.) □ □   STOP: If you have a qualifying child, answer questions 8 and 9 and skip 10 – 12. If you do not have a qualifying child, skip questions 8 and 9 and answer 10 – 12.*     8. Does your child meet the relationship, age, residency, and joint return tests for a qualifying child? (See Rule 8.) □ □ 9. Is your child a qualifying child only for you? Answer "Yes" if (a) your qualifying child does not meet the tests to be a qualifying child of any other person or (b) your qualifying child meets the tests to be a qualifying child of another person but you are the person entitled to treat the child as a qualifying child under the tiebreaker rules explained in Rule 9. Answer "No" if the other person is the one entitled to treat the child as a qualifying child under the tiebreaker rules. □ □ 10. Were you (or your spouse if filing a joint return) at least age 25 but under 65 at the end of 2011? (See Rule 11.) □ □ 11. Answer "Yes" if you (and your spouse if filing a joint return) cannot be claimed as a dependent on anyone else's return. Answer "No" if you (or your spouse if filing a joint return) can be claimed as a dependent on someone else's return. (See Rule 12.) □ □ 12. Was your main home (and your spouse's if filing a joint return) in the United States for more than half the year? (See Rule 14.) □ □ * PERSONS WITH A QUALIFYING CHILD: If you answered "Yes" to questions 1 through 9, you can claim the EIC. Remember to fill out Schedule EIC and attach it to your Form 1040 or Form 1040A. You cannot use Form 1040EZ. If you answered "Yes" to questions 1 through 7 and "No" to question 8, answer questions 10 through 12 to see if you can claim the EIC without a qualifying child.   PERSONS WITHOUT A QUALIFYING CHILD: If you answered "Yes" to questions 1 through 7, and 10 through 12, you can claim the EIC.   If you answered "No" to any question that applies to you: You cannot claim the EIC.