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Approved Form 4361 or Form 4029 This section is for persons who have an approved: • Form 4361, Application for Exemption From Self-Em- ployment Tax for Use by Ministers, Members of Reli- gious Orders, and Christian Science Practitioners or • Form 4029, Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits. Each approved form exempts certain income from so- cial security taxes. Each form is discussed here in terms of what is or isn't earned income for the EIC. Form 4361. Whether or not you have an approved Form 4361, amounts you received for performing ministerial du- ties as an employee count as earned income. This in- cludes wages, salaries, tips, and other taxable employee compensation. If you have an approved Form 4361, a nontaxable housing allowance or the nontaxable rental value of a home isn't earned income. Also, amounts you received for performing ministerial duties, but not as an employee, don't count as earned income. Examples include fees for performing marriages and honoraria for delivering speeches. Form 4029. Whether or not you have an approved Form 4029, all wages, salaries, tips, and other taxable em- ployee compensation count as earned income. However, amounts you received as a self-employed individual don't count as earned income. Also, in figuring earned income, don't subtract losses on Schedule C or F from wages on line 1 of Form 1040 and 1040-SR. Disability Benefits If you retired on disability, taxable benefits you receive un- der your employer's disability retirement plan are consid- ered earned income until you reach minimum retirement age. Minimum retirement age is generally the earliest age at which you could have received a pension or annuity if you weren’t disabled. You must report your taxable disa- bility payments on line 1 of Form 1040 and 1040-SR until you reach minimum retirement age. Beginning on the day after you reach minimum retire- ment age, payments you receive are taxable as a pension and aren't considered earned income. Report taxable pension payments on Form 1040 or 1040-SR, lines 5a and 5b. Disability insurance payments. Payments you re- ceived from a disability insurance policy that you paid the premiums for aren't earned income. It doesn't matter whether you have reached minimum retirement age. If this policy is through your employer, the amount may be shown in box 12 of your Form W-2 with code J. Income That Is Not Earned Income Examples of items that aren't earned income include inter- est and dividends, pensions and annuities, social security and railroad retirement benefits (including disability bene- fits), alimony and child support, welfare benefits, workers' compensation benefits, unemployment compensation (in- surance), nontaxable foster care payments, and veterans' benefits, including VA rehabilitation payments. Don’t in- clude any of these items in your earned income. Earnings while an inmate. Amounts received for work performed while an inmate in a penal institution aren't earned income when figuring the earned income credit. This includes amounts for work performed while in a work release program or while in a halfway house. Workfare payments. Nontaxable workfare payments aren't earned income for the EIC. These are cash pay- ments certain people receive from a state or local agency that administers public assistance programs funded under the federal Temporary Assistance for Needy Families (TANF) program in return for certain work activities such as (1) work experience activities (including remodeling or repairing public housing) if sufficient private sector em- ployment isn't available, or (2) community service pro- gram activities. Community property. If you are married, but qualify to file as head of household or married filing separately un- der special rules for married taxpayers living apart (see Rule 3), and live in a state that has community property laws, your earned income for the EIC doesn't include any amount earned by your spouse that is treated as belong- ing to you under those laws. That amount isn't earned in- come for the EIC, even though you must include it in your gross income on your income tax return. Your earned in- come includes the entire amount you earned, even if part of it is treated as belonging to your spouse under your state's community property laws. Nevada, Washington, and California domestic partners. If you are a registered domestic partner in Ne- vada, Washington, or California, the same rules apply. Your earned income for the EIC doesn't include any amount earned by your partner. Your earned income in- cludes the entire amount you earned. For details, see Pub. 555. Conservation Reserve Program (CRP) payments. If you were receiving social security retirement benefits or social security disability benefits at the time you received any CRP payments, your CRP payments aren't earned in- come for the EIC. Nontaxable military pay. Nontaxable pay for members of the Armed Forces isn't considered earned income for the EIC. Examples of nontaxable military pay are combat pay, the Basic Allowance for Housing (BAH), and the Ba- sic Allowance for Subsistence (BAS). See Pub. 3, Armed Forces' Tax Guide, for more information. Combat pay. You can elect to include your non- taxable combat pay in earned income for the EIC. See Nontaxable combat pay in chapter 4. TIP Chapter 1 Rules for Everyone Page 9