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:
“It is pitiful when a man bears a name for convenience merely, who has earned neither name nor fame.”
—Henry David Thoreau (1817–1862)
“You boast of spending a tenth part of your income in charity; maybe you should spend the nine tenths so, and done with it.”
—Henry David Thoreau (1817–1862)