Example

Earl and Waltina Perry both have jobs. They have two children, Janelle and Jason, who meet the relationship, age, residency and joint return tests. Both were under age 19 at the end of the year. Earl and Waltina file a joint tax return. They are eligible to claim the earned income credit. Review Schedule EIC for the Perrys.

Review page two of Form 1040 for the Perrys. Their tax is $730. The federal income tax withheld is $1,010. The earned income credit is shown on line 27. The Perrys have a refund of $2,031.00. $1,751 of the refund is a result of the earned income credit.