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Taxmap/pub17/p17-191.htm#TXMP23bc8cf4 Examples

Examples

The following two comprehensive examples (complete with filled-in forms) may be helpful.

1. John and Janet Smith, a married couple with one qualifying child and using Form 1040A.
2. Kelly Green, age 30, a student, with no qualifying child and using Form 1040EZ.

Taxmap/pub17/p17-191.htm#TXMP010cd37d Example 1. John and Janet Smith (Form 1040A)

John and Janet Smith are married and will file a joint return. They have one child, Amy, who is 3 years old. Amy lived with John and Janet for all of 2004. John worked and earned $9,500. Janet worked part of the year and earned $1,500. Their earned income and AGI are $11,000. John and Janet qualify for the earned income credit and fill out the EIC Worksheet and Schedule EIC. The Smiths will attach Schedule EIC to Form 1040A when they send their completed return to the IRS.

They took the following steps to complete Schedule EIC and the EIC Worksheet.

Taxmap/pub17/p17-191.htm#TXMP1333317f Completing Schedule EIC

Schedule EIC

The Smiths complete Schedule EIC because they have a qualifying child. They enter "John and Janet Smith" and John's SSN (the SSN that appears first on their Form 1040A) on the line at the top of Schedule EIC. The Smiths then fill out Qualifying Child Information (lines 1–6).

Taxmap/pub17/p17-191.htm#TXMP147ca30f Line 1.

The Smiths enter Amy's first name and last name in the column "Child 1."

Taxmap/pub17/p17-191.htm#TXMP150f9957 Line 2.

They enter Amy's SSN.

Taxmap/pub17/p17-191.htm#TXMP653221b1 Line 3.

They enter Amy's year of birth (2001).

Taxmap/pub17/p17-191.htm#TXMP2aa65772 Lines 4a and 4b.

The Smiths skip lines 4a and 4b because Amy was born after 1985.

Taxmap/pub17/p17-191.htm#TXMP7788a722 Line 5.

The Smiths enter "Daughter." This line shows Amy's relationship to John and Janet.

Taxmap/pub17/p17-191.htm#TXMP340aab48 Line 6.

The Smiths enter "12." This is how many months Amy lived with them in 2004.

Taxmap/pub17/p17-191.htm#TXMP63145282 Completing the EIC Worksheet

EIC Worksheet

Next, the Smiths will complete the EIC Worksheet to figure their earned income credit.

Taxmap/pub17/p17-191.htm#TXMP06c15df9 Line 1.

The Smiths enter $11,000 (their earned income).

Taxmap/pub17/p17-191.htm#TXMP4f09b4ac Line 2.

The Smiths go to the Earned Income Credit Table in the Form 1040A instructions. The Smiths find their income of $11,000 within the range of $11,000 to $11,050. They follow this line across to the column that describes their filing status and number of children and find $2,604. They enter $2,604 on line 2.

Taxmap/pub17/p17-191.htm#TXMP4885f447 Line 3.

The Smiths enter their AGI of $11,000.

Taxmap/pub17/p17-191.htm#TXMP47ac0757 Line 4.

The Smiths check the "Yes" box because lines 1 and 3 are the same ($11,000). They skip line 5 and enter the amount from line 2 ($2,604) on line 6.

Taxmap/pub17/p17-191.htm#TXMP023723c3 Line 6.

The Smiths' EIC is $2,604.

Taxmap/pub17/p17-191.htm#TXMP42123da5 Example 2. Kelly Green (Form 1040EZ)

Kelly Green is age 30 and a full-time student. She lived with her parents in the United States for all of 2004. She had a part-time job and earned $6,240. She earned $20 interest on a savings account. She is not eligible to be claimed as a dependent on her parents' return. Although she lived with her parents, she is not their qualifying child because she does not meet the age test. She does not have any children.

Kelly qualifies for the earned income credit. Kelly will file Form 1040EZ and complete the EIC Worksheet.

Taxmap/pub17/p17-191.htm#TXMP3a1165e7 Completing the EIC Worksheet

EIC Worksheet

Kelly figures the amount of her earned income credit on the EIC Worksheet as follows.

Taxmap/pub17/p17-191.htm#TXMP797dc8bb Line 1.

She enters $6,240 (her earned income).

Taxmap/pub17/p17-191.htm#TXMP457bdded Line 2.

Kelly goes to the Earned Income Credit Table in the forms instruction booklet. She finds her earned income of $6,240 in the range of $6,200 to $6,250. Kelly follows this line across to the column that describes her filing status and number of children and finds $390. She enters $390 on line 2.

Taxmap/pub17/p17-191.htm#TXMP2e1858e7 Line 3.

Kelly enters $6,260 (her AGI).

Taxmap/pub17/p17-191.htm#TXMP1dd52bd0 Line 4.

Kelly checks the "No" box because lines 1 and 3 are not the same.

Taxmap/pub17/p17-191.htm#TXMP62072a57 Line 5.

Kelly checks the "Yes" box because the amount on line 3 ($6,260) is less than $6,400. She leaves line 5 blank and enters the amount from line 2, $390, on line 6.

Taxmap/pub17/p17-191.htm#TXMP40458faf Line 6.

She enters $390 here and on Form 1040EZ, line 8a. Kelly's earned income credit is $390.

Previous Page:  Publication 17 - Your Federal Income Tax - Part D. Figuring and Claiming the EIC Next Page:  Publication 17 - Your Federal Income Tax - Advance Earned Income Credit Use     to find additional instances of index items.