The credit benefits people who work and have earned income that’s less than $53,930.
Nontaxable pay for member of the armed forces isn’t earned income for the EITC.
- Combat pay
- Basic allowance for housing
- Basic allowance for subsistence
Member can elect to have their nontaxable combat pay included in earned income.
Taxpayers who elect to include their combat pay in income must include all nontaxable combat pay they received. Can’t choose to include only a part of the nontaxable combat pay. Couples have a few options.