Publication 554 - Older Americans' Tax Guide - 2002 Page 24
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29Payments that are not disability income. Any pay-
1040 or 1040A), and capital gain net income (line 13 of
ment you receive from a plan that does not provide for
Form 1040, if more than zero, or line 10 of Form 1040A).
disability retirement is not disability income. Any lump-sum
See Publication 596 for more information.
payment for accrued annual leave that you receive when
Credit has no effect on certain welfare benefits. The
you retire on disability is a salary payment and is not
earned income credit and the advance earned income
disability income.
credit payments you receive generally will not be used to
For purposes of the credit for the elderly or the disabled,
determine whether you are eligible for the following benefit
disability income does not include amounts you receive
programs, or how much you can receive from the pro-
after you reach mandatory retirement age. Mandatory
grams.
retirement age is the age set by your employer at which
•
you would have had to retire had you not become disabled.
Medicaid and supplemental security income (SSI).
•
Food stamps.
Figuring the Credit
•
Low-income housing.
If you figure the credit yourself, fill out the front of either
Temporary assistance for needy families (TANF) benefits
Schedule R (if you are filing Form 1040) or Schedule 3 (if
may be affected. Please check with your state.
you are filing Form 1040A). Next, fill out Part III of either
Schedule R or Schedule 3.
Social security number. You must provide a correct and
valid social security number (SSN) for yourself, your
spouse, and any qualifying children. If an SSN is missing
Child and Dependent
or incorrect, you may not get the credit. Publication 596
contains more detailed information.
Care Credit
The social security number must be issued by the
!
Social Security Administration to a U.S. citizen or
You may be able to claim this credit if you pay someone to
to a person who has permission from the Immi-
CAUTION
care for your dependent who is under age 13 or for your
gration and Naturalization Service to work in the United
spouse or dependent who is not able to care for himself or
States. If your social security card says Not valid for
herself. The credit can be up to 30% of your expenses. To
employment, you cannot get the earned income credit.
qualify, you must pay these expenses so you can work or
look for work.
Self-employed persons. If you are self-employed and
If you claim this credit, you must include on your
your net earnings are $400 or more, be sure to fill out
!
return the name and taxpayer identification num-
correctly Schedule SE (Form 1040), Self-Employment
ber (generally the social security number) of each
CAUTION
Tax, and pay the proper amount of self-employment tax. If
qualifying person. If the correct information is not shown,
you do not, you may not get all the credit to which you are
the credit may be reduced or disallowed.
entitled.
You also must show on your return the name, address,
and the taxpayer identification number of the person(s) or
Who Can Claim the Credit?
organization(s) that provided the care.
For more information, see Publication 503, Child and
The earned income credit is available to persons with or
Dependent Care Expenses.
without a qualifying child. Some of the rules are the same,
but some of the rules only apply to persons with a qualify-
ing child or to persons without a qualifying child.
Earned Income Credit
Persons Who Work and Have
The earned income credit (EIC) is available to persons with
One or More Qualifying Children
or without a qualifying child. This section will list separately
the rules that persons with a qualifying child and persons
Generally, if you are a nonresident alien for any part of the
without a qualifying child must meet to get the credit. After
year, you cannot claim the credit. To claim the earned
you have read the rules, if you think you may qualify for the
income credit under this section, you must meet all the
credit, get Publication 596, Earned Income Credit. You
following rules.
also can find information in the instructions for Form 1040
(line 64), Form 1040A (line 41), or Form 1040EZ (line 8).
1) You must have a qualifying child who lived with you
in the United States for more than half the year.
Investment income more than $2,550. You cannot claim
2) You must have earned income during the year.
the earned income credit unless your investment income is
$2,550 or less. For most people, investment income is
3) Your earned income and adjusted gross income
taxable interest (line 8a of Form 1040 or 1040A, or line 2 of
(AGI) each must be less than:
Form 1040EZ), tax-exempt interest (line 8b of Form 1040
or 1040A, or written to the right of the words Form 1040EZ
a) $29,201 ($30,201 for married filing jointly) if you
on line 2 of Form 1040EZ), dividend income (line 9 of Form
have one qualifying child, or
Page 24
Chapter 5 Credits
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