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:
“Toiling,—rejoicing,—sorrowing,
Onward through life he goes;
Each morning sees some task begin,
Each evening sees its close;
Something attempted, something done,
Has earned a night’s repose.”
—Henry Wadsworth Longfellow (1809–1882)
“Work though we must, our jobs do not automatically determine our priorities concerning our marriages, our children, our social life, or even our health. It’s still life, constrained as it may be by limited disposable income or leisure time, and we’re still responsible for making it something we enjoy or endure.”
—Melinda M. Marshall (20th century)