EIC Table, 2010
The credit is characterized by a three-stage structure that includes phase-in, plateau, and phase-out.
| Earned income (x) | Stage | Credit (3+ children) |
|---|---|---|
| $1–$12,549 | phase in | 45% * x |
| $12,550–$16,449 | plateau | $5,666 |
| $16,450–$43,349 | phase out | $5,666 – 21% * (x – $16,450) |
| >= $43,350 | no credit | $0 |
| Earned income (x) | Stage | Credit (2 children) |
| $1–$12,549 | phase in | 40% * x |
| $12,550–$16,449 | plateau | $5,036 |
| $16,450–$40,362 | phase out | $5,036 – 21% * (x – $16,450) |
| >= $40,363 | no credit | $0 |
| Earned income (x) | Stage | Credit (1 child) |
| $1–$8,949 | phase in | 34% * x |
| $8,950–$16,449 | plateau | $3,050 |
| $16,450–$35,534 | phase out | $3,050 – 16% * (x – $16,450) |
| >= $35,535 | no credit | $0 |
| Earned income (x) | Stage | Credit (no children) |
| $1–$5,949 | phase in | 7.65% * x |
| $5,950–$7,499 | plateau | $457 |
| $7,500–$13,449 | phase out | $457 – 7.65% * (x – $7,500) |
| >= $13,450 | no credit | $0 |
The actual credit is given by an IRS table which breaks down yearly income into $50 increments.
For Married Filing Jointly in 2010, the credit is no greater; however, the plateaus travel $5,000 further. Thus, the phase-outs for MFJ both begin and end $5,000 later than do the phase-outs for Single, Head of Household, Qualifying Widow(er).
The same data, in words: for a person with two qualifying children, the credit is equal to 40% of the first $12,550 of earned income, thus reaching a plateau of $5,036 of credit received and staying there until earnings increase beyond $16,450, at which point the credit begins to phase out at 21% of income past this point.
The dollar amounts are indexed annually for inflation.
Read more about this topic: Earned Income Tax Credit (US)