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credit is not available for taxpayers with income in excess of
$11,610.
Whereas the credit was once limited to taxpayers who earned
less than $11,610, that limitation has since been raised. Rev.
Proc. 2001-13, sec. 3, 2001-1 C.B. 337, 339. For tax years
beginning in 2001, the “threshold phaseout amount” for a taxpayer
with two dependents is $13,090. Id. Taxpayers who have an
adjusted gross income of more than $13,090 in the taxable year
may only claim a portion of the earned income credit. The
portion a taxpayer may claim is found in the tables published in
the instructions for the Form 1040 series. Furthermore, a
taxpayer with two dependents whose adjusted gross income equals
$32,121 has reached the “completed phaseout amount”, and the
taxpayer may not claim the earned income credit. Id.
Because the payments to Mr. Vogt from IHSS constituted gross
income, petitioners earned in excess of $13,090 during 2001.
Therefore, petitioners have reached the “threshold phaseout
amount” and are only eligible to claim a portion of the earned
income credit for 2001. They are not, however, precluded from
claiming the entire credit because they have two qualifying
children and their adjusted gross income was less than $32,121
for the tax year 2001. Petitioners, therefore, are entitled to a
portion of the earned income credit on their 2001 tax return, as
determined by the instructions in the Form 1040 series.
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Last modified: May 25, 2011