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:
“I have not earned what I have already enjoyed.”
—Henry David Thoreau (1817–1862)
“Happy are those who find wisdom, and those who get understanding, for her income is better than silver, and her revenue better than gold. She is more precious than jewels, and nothing you desire can compare with her. Long life is in her right hand; in her left hand are riches and honor. Her ways are ways of pleasantness, and all her paths are peace. She is a tree of life to those who lay hold of her; those who hold her fast are called happy.”
—Bible: Hebrew, Proverbs 3:13-18.