In this tax tutorial, you will learn about the Earned Income Credit. A tax credit is a dollar-for-dollar reduction of the tax.

The earned income credit is a tax credit for certain people who work and whose earned income and adjusted gross income are under a specified limit.

For 2008, the earned income and adjusted gross income limits are

• $38,646 ($41,646 if married filing jointly) and more than one qualifying child.
• $33,995 ($36,995 if married filing jointly) and one qualifying child.
• $12,880 ($15,880 if married filing jointly) and no qualifying child.

There are many rules that apply to the earned income credit.

At the same adjusted gross income level, taxpayers

• filing a joint return with two or more qualifying children receive the highest earned income credit.
• not filing a joint return if a qualifying child receive the lowest earned income credit.

Eligible taxpayers can receive the earned income credit even if their tax is zero.