Social Security Disability Income not "Earned Income" Eligible for EITC

The EITC (Earned Income Tax Credit) is a "refundable tax credit" ("unconditional money") one can receive after a filing a tax return.

Generally, the EITC is meant to help low income folks who have earnings from a job or self employment.

In this case, (Eva Vellai-Palotay vs. The United States, Ct. of Fed. Claims), a woman who was receiving Social Security disability income sought an EITC tax refund on the basis of her disability income.

However, to qualify for the EITC money, one needs to have earnings from a job or self employment. Disability payments do not qualify for EITC consideration.

The term "eamed income" means wages, salaries, tips, and other
employee compensation, plus the taxpayer's earnings from self-employment.
26 U.S.C. $ 32(c)(2XA) (2012). It does not include amounts received as a
pension, an annuity, unemployment compensation, or workmen's
compensation. 26 C.F.R. $ 1.32-2(c)(2) (2015). Nor does it include welfare
payments or Social Security Disability benefits. Powers v. Comm'r, T.C.
Memo 2000-5, 2000 WL 5255 (2000), aff'd 234 F.3d 1269 (6th Cir. 2000).


Recent content