 TITLE: What Is the Earned Income Tax Credit? CONTENT: How Do Earned Income Tax Credits Work?\n--------------------------------------\nIf you qualify for the EITC, you can apply the credit directly toward your tax bill. For example, if you owe the U.S. government $2,300 in taxes for 2020 and you qualify for an EITC of $3,584, the U.S. government owes you $1,284. Because the EITC is a refundable tax credit, you can receive this money as a tax refund.\nIncome eligibility for the EITC is based on your adjusted gross income and your earned income. Adjusted gross income is all the money you made in a year minus specific deductions and credits. Earned income includes:\n*   Wages, salaries and tips\n*   Pay received for gig work or contracting\n*   Union strike benefits\n*   Nontaxable combat pay\n*   Certain disability benefits received before you reach minimum retirement age\n*   Net earnings from self-employment\nOther types of income are not considered earned. These include:\n*   Interest and dividends\n*   Retirement income\n*   Social security\n*   Unemployment benefits\n*   Alimony\n*   Child support\n*   Pay received for work while in prison END