The Earned Income Credit (EIC) is a valuable credit for lower-income taxpayers who work. It can be worth up to $5,891 for 2012, depending on your:

• Filing status
• Income
• Number of qualifying children

The EIC is refundable, so you can receive the credit as part of your refund -- even if your tax has been reduced to $0. You can qualify for the EIC even if you don't have qualifying children. However, the rules are slightly different than for those with qualifying children.

Taxpayers Without Qualifying Children

To qualify for the EIC, if you don't have qualifying children, you must:

• Be at least 25 years old but younger than 65 on Jan. 1, 2012
• Not be a dependent of another taxpayer
• Not be a qualifying child of another taxpayer
• Live in the United States for more than half the year
• Have earned income and adjusted gross income (AGI) of less than $13,980 — $19,190 if married filing jointly

Taxpayers With Qualifying Children

To qualify for the EIC, if you have 1 or more qualifying children, you must:

• Have a qualifying child who meets the relationship, age, residency, and joint return tests:
  • The child must be your:
    • Child or adopted child
    • Stepchild
    • Eligible foster child
    • Sibling, half-sibling, or step-sibling
    • Descendent of any of the above, like a grandchild or your niece
  • The child must be younger than you and either:
    • Under age 19 or a full-time student under age 24
    • Younger than EIC-claiming taxpayer
    • Any age if permanently and totally disabled
  • The child must have lived with you in the United States for more than half of 2012.
• Have a qualifying child who isn’t claimed by another taxpayer for child-related benefits. However, there are exceptions for children of divorced or separated parents
• Have earned income and AGI less than:
  • $36,920 -- $42,130 if married filing jointly -- with 1 qualifying child
  • $41,952 -- $47,162 if married filing jointly -- with 2 qualifying children
  • $45,060 -- $50,270 if married filing jointly -- with 3 or more qualifying children

Additional Rules for All Taxpayers

To qualify for the EIC, you must:

• Have a valid Social Security number (SSN)
• Not file as married filing separately
• Be a U.S. citizen or resident alien all year
• Not file a Form 2555 or Form 2555-EZ
• Have investment income of $3,200 or less
• Not be a dependent or qualifying child of another taxpayer
• Have earned income

To learn more, see IRS Publication 596: Earned Income Credits.