CAAB

Investing in People, Strengthening Communities

Claiming the Earned Income Tax Credit? This is What the IRS Considers Earned Income

Per the IRS, earned income includes all the taxable income and wages you get from working or from certain disability payments. There are two ways to get earned income: You work for someone who pays you; or, you own or run a business or farm.

Claiming the Earned Income Tax Credit? This is What the IRS Considers Earned Income

Per the IRS, earned income includes all the taxable income and wages you get from working or from certain disability payments.

Earning Income

There are two ways to get earned income:

  • You work for someone who pays you; or,
  • You own or run a business or farm.

Taxable Earned Income includes:

  • Wages, salaries, tips, and other taxable employee pay;
  • Union strike benefits;
  • Long-term disability benefits received prior to minimum retirement age;
  • Net earnings from self-employment if: 

Nontaxable Combat Pay election. You can elect to have your nontaxable combat pay included in earned income for EITC. The amount of your nontaxable combat pay should be shown on your Form W-2, in box 12, with code Q. Electing to include nontaxable combat pay in earned income may increase or decrease your EITC. See Publication 3. Armed Forces Tax Guide, for more information.

Examples of Income that are Not Earned Income:

  • Pay received for work while an inmate in a penal institution
  • Interest and dividends
  • Retirement income
  • Social security
  • Unemployment benefits
  • Alimony
  • Child support.

 

About Capital Area Asset Builders

Capital Area Asset Builders (CAAB) is a non-profit organization whose mission is to create opportunities for low- and moderate-income individuals in the greater DC region to build financial security, savings, and wealth for the future. 

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About the DC EITC Campaign 

The CAAB-managed DC EITC Campaign, is a citywide, cross-sector initiative that provides access to information on the EITC and connects Washingtonians with free tax preparation services throughout the District.

The DC EITC Campaign is made possible through the support from the DC Department of Insurance, Securities and Banking (DISB), Washington Gas, United Way of the National Capital Area as well as other key private sector partners. 

How to give

Now, more than ever, non-profits like Capital Area Asset Builders (CAAB) need your help. Please support CAAB as we continue to help DC residents manage and/or improve their financial situation during these difficult times. If you can't afford to give a monetary gift, please visit our Amazon Wish List where you can choose from a variety of items that CAAB needs in order to better serve our community.

or send a check or money order to
Capital Area Asset Builders (CAAB)
c/o Joseph Leitmann-Santa Cruz, CEO & Executive Director
1100 H Street NW, Suite 200
Washington, DC 20005