How to Calculate EIC Refundable Credit
- 1). Visit the IRS website at IRS.gov and obtain Form 1040 and 1040 instructions. All taxpayers can use Form 1040 to calculate the earned income credit, but if you generally qualify to use Form 1040A, obtain the form and the instructions. Form 1040A is shorter and less complicated than Form 1040.
- 2). Gather your financial tax forms, including all W-2s and 1099s.
- 3). Complete Step 1 through Step 4 of the Earned Income Credit worksheet on Form 1040 instructions to determine the number of children you can claim for the EIC and whether you qualify. Some circumstances, such as having investment or real estate income, might prevent you from qualifying for the credit.
- 4). Combine the amounts in Box 1 of each W-2 and 1099 and enter the total amount in Step 5 of the Earned Income Credit worksheet on Form 1040 instructions. This is your earned income.
- 5). Compare your earned to the Earned Income Credit Table in the 1040 Instructions. If you are single, use the column on the left side of the page; if you are married, use the right column. Locate your earned income and compare it to the column that matches your filing status and number of qualifying children. This amount is your EIC.
