Earned Income
Earned income is defined by the United States Internal Revenue Code as income received through personal effort, with the following as the main sources:
- Wages, salaries, tips, commissions, and other taxable employee pay.
- Net earnings from self-employment.
- Gross income received as a statutory employee.
- Disability payments through a private employer's disability plan received prior to minimum retirement age (62 in 2011).
- Nontaxable combat pay received by a member of the U.S. armed services which he or she elects to include for purposes of EIC calculation. This is an all-or-none election. For each tax year, the sevice member must elect to include either all of the combat pay or none of it.
Read more about this topic: Earned Income Tax Credit
Famous quotes containing the words earned and/or income:
“When I wrote the following pages, or rather the bulk of them, I lived alone, in the woods, a mile from any neighbor, in a house which I had built myself, on the shore of Walden Pond, in Concord, Massachusetts, and earned my living by the labor of my hands only. I lived there two years and two months. At present I am a sojourner in civilized life again.”
—Henry David Thoreau (1817–1862)
“We commonly say that the rich man can speak the truth, can afford honesty, can afford independence of opinion and action;—and that is the theory of nobility. But it is the rich man in a true sense, that is to say, not the man of large income and large expenditure, but solely the man whose outlay is less than his income and is steadily kept so.”
—Ralph Waldo Emerson (1803–1882)