Pub 596

The IRS publishes a large number of publications, including Publication 596, Pub 596 for short, that give detailed advice on a variety of different topics.

Some of the IRS Publications are very general. In contrast, others address very specific situations or topics that can affect a particular group. Each publication is assigned a number and usually has a name, which helps people quickly find the right one to read. Similarly, IRS Publication 596 (Pub 596) is an informational booklet published by the Internal Revenue Service (IRS) to help taxpayers with the Earned Income Credit. It contains helpful guidance on the credit and is regularly updated to keep up with changes in tax law.

Publication 596 was updated in 2018 because of changes in the tax code. The new Earned Income Credit differs from the old Earned Income Credit because it includes certain tax deductions, such as student loans and mortgage interest, that the former credit did not include. 

What is the Earned Income Tax Credit?

The Earned Income Credit (EITC) is a tax credit for working people with low to moderate incomes. The credit helps reduce tax bills and encourages taxpayers to work. It was created to offset the impact of Social Security taxes on low-income Americans and incentivize them to work instead of relying on welfare or other government assistance.

Several different requirements must be met to qualify for the EITC. These include a valid Social Security number, a spouse, and qualifying children. In addition, you and your spouse must be between 25 and 65 years old at the end of the year, and you or your spouse must have earned a certain amount of income. You must file an IRS form 1040 with your federal income tax return to calculate your EITC. The instructions for this form include several worksheets that help you figure out your EITC and how much you can claim.

You can also find an online EITC calculator that will allow you to enter your information and see how much you can claim. These programs are helpful for those who are confused or have trouble figuring out the EITC. The Earned Income Credit can significantly benefit taxpayers and be worth hundreds or thousands of dollars. The amount of the credit varies significantly depending on your filing status, the number of qualifying children, and the income earned. The credit is phased in and then phased out at certain income thresholds. For example, you do not qualify for the credit if your adjusted gross income exceeds the phase-out amount.

Earned Income Tax Credit Rules in the Publication 596
Pub 596 1

Earned Income Tax Credit Rules in the Publication 596

Chapter 1. Rules for Everyone:

  • Rule 1: Adjusted Gross Income (AGI) Limits
  • Rule 2: You Must Have a Valid Social Security Number (SSN)
  • Rule 3: If You Are Separated From Your Spouse and Not Filing a Joint Return, You Must Meet Certain Rules
  • Rule 4: You Must Be a U.S. Citizen or Resident Alien All Year
  • Rule 5: You Cannot File Form 2555
  • Rule 6: Your Investment Income Must Be $10,300 or Less
  • Rule 7: You Must Have Earned Income

Chapter 2. Rules if You Have a Qualifying Child:

  • Rule 8: Your Child Must Meet the Relationship, Age, Residency, and Joint Return Tests
  • Rule 9: Your Qualifying Child Cannot Be Used by More Than One Person To Claim the EIC
  • Rule 10: You Cannot Be a Qualifying Child of Another Taxpayer

Chapter 3. Rules If You Do Not Have a Qualifying Child:

  • Rule 11: You Must Meet the Age Requirements
  • Rule 12: You Cannot Be the Dependent of Another Person
  • Rule 13: You Cannot Be a Qualifying Child of Another Taxpayer
  • Rule 14: You Must Have Lived in the United States More Than Half of the Year

Chapter 4. Figuring and Claiming the EIC:

  • Rule 15—Earned Income Limits
  • IRS Will Figure the EIC for You
  • How To Figure the EIC Yourself

Chapter 5. Disallowance of the EIC

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