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IRS.gov Website
Publication 596
taxmap/wpubs/p596-013.htm#en_us_publink1000167350

Chapter 6
Detailed Examples

The next few pages contain four detailed examples (with a filled-in Schedule EIC and EIC Worksheets) that may be helpful if you have questions about claiming the EIC.

taxmap/wpubs/p596-013.htm#en_us_publink1000167352

Example 1. Cynthia and Jerry Grey(p34)

rule
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Example:(p34)
 Cynthia and Jerry Grey have two children and are both employed.
Cynthia and Jerry Grey have two children, Kirk, age 8, and Susanne, age 6. The children lived with Cynthia and Jerry for all of 2011. Cynthia earned wages of $15,000 and Jerry had wages of $10,000. The Greys received $525 in interest on their savings account. They had no other income in 2011.
Cynthia and Jerry have the 2011 Form 1040A and instructions. They want to see if they qualify for the EIC, so they follow the steps in the instructions for lines 38a and 38b.
taxmap/wpubs/p596-013.htm#en_us_publink1000167353
Step 1.(p34)
The amount Cynthia and Jerry entered on Form 1040A, line 22, was $25,525. They both have valid social security numbers (SSNs). They will file a joint return. Neither Cynthia nor Jerry is a nonresident alien. Therefore, the answers they give to the questions in Step 1 allow them to proceed to Step 2.
taxmap/wpubs/p596-013.htm#en_us_publink1000167354
Step 2.(p34)
The only investment income the Greys have is their $525 interest income. That amount is not more than $3,150, so they answer "No" to the second question in Step 2 and go to Step 3.
taxmap/wpubs/p596-013.htm#en_us_publink1000167355
Step 3.(p34)
Their children, Kirk and Susanne, meet the relationship, age, residency, and joint return tests to be Cynthia and Jerry's qualifying children, so Cynthia and Jerry answer "Yes" to the first question in Step 3. Kirk and Susanne are not qualifying children of anyone else. Both children have valid SSNs. Cynthia and Jerry are not qualifying children of anyone else, so they answer "No" to the second question in Step 3. This means they can skip Step 4 and go to Step 5.
taxmap/wpubs/p596-013.htm#en_us_publink1000167356
Step 5.(p34)
Cynthia and Jerry figure their earned income to be $25,000, the amount of their combined wages. This is less than $46,044, so they go to Step 6 to figure their credit.
taxmap/wpubs/p596-013.htm#en_us_publink1000167357
Step 6.(p34)
Cynthia and Jerry want to figure their EIC themselves, so they complete the EIC Worksheet in the Form 1040A instructions (shown later).
taxmap/wpubs/p596-013.htm#en_us_publink1000167358
Completing the EIC Worksheet.(p34)
Cynthia and Jerry complete their worksheet as follows.
  1. Cynthia and Jerry enter their total earned income ($25,000) on line 1.
  2. To find their credit, they go to the EIC Table (in the Appendix of this publication). The part of the EIC Table they use is included as part of this example. They find their earned income of $25,000 in the range of $25,000 to $25,050. They follow this line across to the column Two children under Married filing jointly and find $4,426. They enter $4,426 on line 2.
  3. They enter on line 3 their AGI ($25,525) and see that it is different from the amount on line 1.
  4. They look up $25,525 in the EIC Table and enter the amount of $4,321 on line 5.
  5. They enter $4,321 on line 6. This is the smaller of the line 2 amount ($4,426) and the line 5 amount ($4,321).
  6. The Greys enter $4,321 on line 38a of their Form 1040A. They will now complete Schedule EIC (shown later) and attach it to their return. They will keep the EIC Worksheet for their records.
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Exerpt from EIC table for Cynthia and Jerry Grey's example. Text DescriptionExerpt from EIC table for Cynthia and Jerry Grey's example.