Eligibility – income

The income limits are based on the federal Earned Income Tax Credit (ETIC). View the current income limits . Note: These thresholds change each year and will be updated on the IRS’s website.

Unearned income is personal income that is gained from sources unrelated to employment. The following are examples of sources that are not considered earned income:

Nontaxable employee pay.

Dependent care benefits.

Adoption benefits.

Basic housing allowance.

Disability insurance payment (paid premiums).

Interest.

Dividends.

Pensions.

Annuities.

Social security.

Railroad retirement benefits.

Alimony.

Child support.

Welfare benefits.

Workers’ compensation benefits.

Unemployment compensation.

Nontaxable foster care payments.

Veterans’ benefits.

VA rehabilitation payments.

Inmate income.

No. A qualifying child’s income is not a factor in your AGI.

Yes, having foreign income and filing form 2555 disqualifies you from receiving the Working Families Tax Credit.

Yes, but investment income cannot exceed $11,600 for applicants filing single or jointly. Examples of investment income include:

Interest.

Dividends.

Rental income.

Royalty income.

Capital gains.

Cryptocurrency interest.

Yes. If you receive strike benefits from your Union, you must include payments as earned income to determine your eligibility for the program.

No. Any income you receive while in any penal institution (inmate income), work release program, and/or halfway house is not earned income.

Alimony or spousal support you receive is not considered earned income.

Including combat pay can increase or decrease the refund amount received from the federal government. As such, you are allowed to include your combat pay if it increases your refund or leave it out if it decreases your refund.

If you are retired on disability, taxable benefits you receive under your employer's disability retirement plan are considered earned income until you reach minimum retirement age. Minimum retirement age is generally the earliest age at which you can receive a pension or annuity if you were not disabled.

Also, combat pay can be earned or unearned income. Taxpayers are allowed to include their combat pay if it increases their credit or leave it out if it decreases their credit.

If you file a joint tax return, your spouse’s income is combined with your income to determine if you and your spouse meet the income requirements.

It may depend on when you divorced, and how you file your federal taxes. If you were married more than half of the year, your ex-spouse’s income could be earned income for WFTC purposes.