You can’t include Basic Allowance for Housing as earned income for purposes of the Earned Income Tax Credit.
IRS says when figuring your earned income for purposes of the EIC, don't include any of these amounts.
- Basic pay or special, bonus, or other incentive pay that is subject to the combat zone exclusion (unless you make the election described earlier under Can I treat my nontaxable combat zone pay as earned income).
- Basic Allowance for Housing (BAH).
- Basic Allowance for Subsistence (BAS).
- Any other nontaxable employee compensation.
- Interest and dividends.
- Social security and railroad retirement benefits.
- Certain workfare payments.
- Pensions or annuities.
- Veterans' benefits (including VA rehabilitation payments).
- Workers' compensation.
- Unemployment compensation.
- Alimony and child support.
See What’s is included in my earned income for EIC
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