Types of Earned Income

Earned income includes wages, salaries, tips, and other taxable employee pay. Earned income does not include interest and dividends, social security and railroad retirement benefits, workfare payments, alimony and child support, or anything else of value received from someone for services performed, if it is not currently taxable.

To be sure you correctly identify all sources of earned income, refer to the Earned Income Table in the Volunteer Resource Guide (Tab H).

There is a limit to the amount of investment income a person can receive and still qualify for the EIC. Taxpayers cannot qualify for the EIC if their investment income, including interest, is over $3,150.

Investment income includes taxable interest and dividends, tax-exempt interest, capital gain net income, and income from residential rental property.