Earned Income
However it may be defined by the other countries listed above, earned income is defined by the United States Internal Revenue Code as a designation of income received through personal effort and differentiating it from other kinds, principally capital gains (e.g. dividends and interest) or moneys paid from social entitlements. The following are 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 pay is considered earned income if received before minimum retirement age (62 in in 2011). However, this becomes technical, and only some disability payments are considered a replacement of wages.
- Nontaxable combat pay that a member of the U.S. armed services elects to include solely for purposes of EIC calculation and the service member must include all or none of the combat pay in this calculation.
Earned income, outside the stipulations of specific tax jurisdictions, is essentially just that but as the list above shows, it's not identical with wages although the credit is primarily directed to the benefit of US households with children or other dependents whose income is largely or solely from wages.
Read more about this topic: Earned Income Tax Credit (US)
Famous quotes containing the words earned and/or income:
“To-day ... when material prosperity and well earned ease and luxury are assured facts from a national standpoint, womans work and womans influence are needed as never before; needed to bring a heart power into this money getting, dollar-worshipping civilization; needed to bring a moral force into the utilitarian motives and interests of the time; needed to stand for God and Home and Native Land versus gain and greed and grasping selfishness.”
—Anna Julia Cooper (18591964)
“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 (18031882)