Preliminary Rules

• In addition to earning income from employment, self-employment or an additional source to qualify for EITC, applicants must possess a valid Social Security number. You must be a U.S. citizen, a resident alien or a nonresident married to a U.S. citizen or resident alien for the entire tax year and choose to file a joint return. Couples who use the married filing separate filing status are ineligible for the EITC. Your adjusted gross income, earned income and investment income may not exceed maximum income limits and credit amounts for the current tax year. For example, for the 2010 tax year, a family of four could earn no more than $45,373 to be eligible for a maximum credit of $5,036.
  
  

Qualifying Child

• Individuals who claim qualifying children for the EITC have the potential to earn additional credits. You can use up to three qualifying children to claim the EITC. A dependent must possess a valid Social Security number and pass four tests--relationship, age, residency and joint return tests--to be a qualifying child. You can claim your blood children, adopted or foster children, step-children, half-siblings, step-brother or step-sister or any descendant of any of these relationships as a qualifying child. The child must be no older than 19 at the end of the tax year, or no older than 24 if he attends school full-time. A qualifying child must live within the U.S. for more than 50 percent of the current tax year. If the dependent filed a joint return, he may be ineligible as a qualifying child. If someone else is able to claim your dependent as a qualifying child, you can't claim him as a qualifying child.
  
  

Childless Famalies

• The EITC isn't just for families with dependent children. According to the IRS, childless families are the largest group of taxpayers who are eligible for the EITC, but don't to claim the credit. Low-income, childless workers may be eligible for the EITC if the household earned and adjusted gross incomes doesn't exceed the childless worker's limit for the current tax year, $18,470 for couples and $13,460 for individuals, as of the time of publication. In addition to meeting the preliminary rules, low-income childless workers must be at least 25 and no older than 65 at the end of the tax year. These individuals must reside in the U.S. for more than 50 percent of the year and not qualify as a dependent for another working individual.
  
  

Special EITC Rules

• The IRS uses a separate set of EITC rules for ministers, clergymen, military servicemembers and disability benefit recipients. If you receive disability benefits, the IRS considers these benefits earned income until you reach retirement age. Up until that point, you may use your benefits as earned income to claim the EITC. Military service members can include or exclude nontaxable combat pay as earned income for the EITC. The IRS recommends calculating your taxes with and without noncombat pay to determine the more beneficial option. If you are a minister or clergy member and your home or housing allowance is part of your pay, it is considered apart of your net earnings and therefore included in earned income for EITC calculations. However, you may complete a Form 4361 or Form 4029 exemption to remove your housing allowance from your earned income for EITC calculations.