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Form 1040—Lines 64a and 64b Continued from page 49 • No qualifying children, is your earned income less than $13,440 ($18,440 if married filing jointly)? Earned Income Step 5 Yes. Go to Step 6. No. STOP You cannot take the credit. 1. Are you filing Schedule SE because you were a member of the clergy or you had church employee income of $108.28 or more? Yes. See Clergy or No. Continue  How To Figure the Credit Step 6 Church employees, whichever applies, on 1. Do you want the IRS to figure the credit for you? this page. Yes. See Credit No. Go to Worksheet A figured by the IRS on on page 52. 2. Figure earned income: this page. Form 1040, line 7 Definitions and Special Rules Subtract, if included on line 7, any: • Taxable scholarship or fellowship grant Adopted child. An adopted child is always treated as your own child. An adopted child includes a child lawfully placed with you not reported on a Form W-2. for legal adoption. • Amount received for work performed while an inmate in a penal institution Church employees. Determine how much of the amount on Form (enter “PRI” and the amount subtracted 1040, line 7, was also reported on Schedule SE, line 5a. Subtract on the dotted line next to Form 1040, that amount from the amount on Form 1040, line 7, and enter the line 7). result in the first space of Step 5, line 2. Be sure to answer “Yes” to question 3 in Step 5. • Amount received as a pension or annuity from a nonqualified deferred – Clergy. The following instructions apply to ministers, members of compensation plan or a nongovernmental religious orders who have not taken a vow of poverty, and Christian section 457 plan (enter “DFC” and the Science practitioners. If you are filing Schedule SE and the amount amount subtracted on the dotted line next on line 2 of that schedule includes an amount that was also reported } on Form 1040, line 7: to Form 1040, line 7). This amount may be shown in box 11 of Form W-2. If you 1. Enter “Clergy” on the dotted line next to Form 1040, line 64a. received such an amount but box 11 is 2. Determine how much of the amount on Form 1040, line 7, blank, contact your employer for the was also reported on Schedule SE, line 2. amount received as a pension or annuity. 3. Subtract that amount from the amount on Form 1040, line 7. Enter the result in the first space of Step 5, line 2. Add all of your nontaxable combat pay if 4. Be sure to answer “Yes” to question 3 in Step 5. you elect to include it in earned income. Also enter this amount on Form 1040, Combat pay, nontaxable. If you were a member of the U.S. Armed line 64b. See Combat pay, nontaxable on Forces who served in a combat zone, certain pay is excluded from this page. + your income. See Combat Zone Exclusion in Pub. 3. You can elect to include this pay in your earned income when figuring the EIC. The amount of your nontaxable combat pay should be shown in box 12 of Form(s) W-2 with code Q. If you are filing a joint return and both you and your spouse received nontaxable combat pay, you can CAUTION ! Electing to include nontaxable each make your own election. combat pay may increase or decrease your EIC. Figure the credit with and Credit figured by the IRS. To have the IRS figure your EIC: without your nontaxable combat pay 1. Enter “EIC” on the dotted line next to Form 1040, line 64a. before making the election. 2. Be sure you enter the nontaxable combat pay you elect to include in earned income on Form 1040, line 64b. See Com- Earned Income = bat pay, nontaxable above. 3. If you have a qualifying child, complete and attach Schedule EIC. If your EIC for a year after 1996 was reduced or disal- 3. Were you self-employed at any time in 2009, or are you lowed, see Form 8862, who must file below. filing Schedule SE because you were a member of the clergy or you had church employee income, or are you filing Schedule C or C-EZ as a statutory employee? Exception to time lived with you. Temporary absences by you or the child for special circumstances, such as school, vacation, busi- Yes. Skip question 4 No. Continue  ness, medical care, military service, or detention in a juvenile facil- and Step 6; go to ity, count as time the child lived with you. Also see Kidnapped child Worksheet B on on page 19 or Members of the military on page 51. A child is page 53. considered to have lived with you for all of 2009 if the child was born or died in 2009 and your home was this child’s home for the 4. If you have: entire time he or she was alive in 2009. • 3 or more qualifying children, is your earned income less Form 4797 filers. If the amount on Form 1040, line 13, includes an than $43,279 ($48,279 if married filing jointly)? amount from Form 4797, you must use Worksheet 1 in Pub. 596 to see if you can take the EIC. Otherwise, stop; you cannot take the • 2 qualifying children, is your earned income less than EIC. $40,295 ($45,295 if married filing jointly)? Form 8862, who must file. You must file Form 8862 if your EIC for • 1 qualifying child, is your earned income less than $35,463 ($40,463 if married filing jointly)? a year after 1996 was reduced or disallowed for any reason other Need more information or forms? See page 96. - 50 -