2016 Earned Income Credit Income Limits, Maximum Credit Amounts and Tax Law Updates
2016 Earned Income and AGI Limits
Earned income and adjusted gross income (AGI) must each be less than:
|If filing…||Qualifying Children Claimed|
|Zero||One||Two||Three or more|
|Single, Head of Household or Widowed||$14,880||$39,296||$44,648||$47,955|
|Married Filing Jointly||$20,430||$44,846||$50,198||$53,505|
Investment Income Limit
Investment income must be $3,400 or less for the year.
Maximum Credit Amounts
The maximum amount of credit for Tax Year 2016 is:
- $6,269 with three or more qualifying children
- $5,572 with two qualifying children
- $3,373 with one qualifying child
- $506 with no qualifying children
For more information on whether a child qualifies you for EITC, see:
- Qualifying Child Rules, or
- Publication 596, Rules If You Have a Qualifying Child.
The American Tax Relief Act of 2012
The American Tax Relief act extended the relief for married taxpayers, the expanded credit for taxpayers with three or more qualifying children and other provisions to December 31, 2017
What is 2016 Earned Income Credit?
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
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:
- You own or operate a business or a farm or
- You are a minister or member of a religious order (see Special Rules page for more information);
- You are a statutory employee and have income. (See definition of statutory employee on ourHelpful Definitions and Acronyms for EITC page).
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