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Earned Income Credit

 

2007 Changes

The following paragraphs explain the changes to the credit for 2007. For details, see Publication 596, Earned Income Credit (EIC).

Amount of credit increased. The maximum amount of the credit has increased. The most you can get is:

  • $2,853 if you have one qualifying child
  • $4,716 if you have more than one qualifying child, or
  • $428 if you do not have a qualifying child.

Earned income amount increased. The maximum amount of income you can earn and still get the credit has increased. You may be able to take the credit if:

  • You have more than one qualifying child and you earned less than $37,783 ($39,783 if married filing jointly),
  • You have one qualifying child and you earned less than $33,241 ($35,241 if married filing jointly), or
  • You do not have a qualifying child and you earned less than $12,590 ($14,590 if married filing jointly).

The maximum amount of AGI you can have and still get the credit also has increased. You may be able to take the credit if your AGI is less than the amount in the above list that applies to you.

Investment income amount increased. The maximum amount of investment income you can have and still get the credit has increased to $2,900.

Advance payment of the credit. If you get advance payments of the credit from your employer with your pay, the total advance payments you get during 2007 can be as much as $1,712.

 

2008 Changes

The following paragraphs explain the changes to the credit for 2008.

Amount of credit increased. The maximum amount of the credit has increased. The most you can get is:

  • $2,917 if you have one qualifying child,
  • $4,824 if you have more than one qualifying child, or
  • $438 if you do not have a qualifying child.

Earned income amount increased. The maximum amount of income you can earn and still get the credit has increased for 2008. You may be able to take the credit if:

  • You have more than one qualifying child and you earn less than $38,646 ($41,646 if married filing jointly),
  • You have one qualifying child and you earn less than $33,995 ($36,995 if married filing jointly), or
  • You do not have a qualifying child and you earn less than $12,880 ($15,880 if married filing jointly).

The maximum amount of AGI you can have and still get the credit also has increased. You may be able to take the credit if your AGI is less than the amount in the above list that applies to you.

Investment income amount increased. The maximum amount of investment income you can have and still get the credit has increased to $2,950 for 2008.

Advance payment of the credit. If you get advance payments of the credit from your employer with your pay, the total advance payments you get during 2008 can be as much as $1,750.

Nontaxable combat pay election. You can elect to include your nontaxable combat pay in earned income when you figure your earned income credit for 2008. This election was due to expire at the end of 2007 but has been extended to years after 2007.

-27-MAR-2008

updated 12-SEP-2008