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What Counts Toward the Earned Income Tax Credit?

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    Your Paycheck

    • Everything you might normally consider income counts toward the total on this credit. If you are paid hourly, your wages count. This is true whether you get a paycheck or if you work for an individual and get paid cash. Salaries count if you are paid weekly or monthly. All tips you receive during the year counts as earned income.

    Union Strike Benefits

    • When union members go on strike, the union often pays each member a nominal amount of money every week, known as "strike pay." These strike benefits count as earned income when calculating your eligibility.

    Long-Term Disability

    • If you haven't reached the current minimum retirement age and you receive long-term disability payments, this money counts as earned income. This is true whether the payment comes from the Social Security Administration or from a private fund.

    Self-Employment Earnings

    • Your net earnings count as earned income if you are in business for yourself. This is true whether you sell a few craft items online or if you have a full-time consulting business. Your net income is your total income minus any allowable deductions for the business.

    Nontaxable Combat Pay

    • If you are deployed into a war zone or other dangerous spot, the military may give you combat pay, which is not subject to being taxed. You may choose to count this pay toward your total earned income or not, depending on your own particular financial needs.

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