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It helps to think of earned income as money you work for, as opposed to passive income like interest, dividends, or rental income if you're not in the business of renting out properties.
The IRS defines earned income as:
The IRS also gives you the option of treating nontaxable combat pay (code Q in box 12 of your W-2) as earned income for the Earned Income Credit (EIC).
Worker's comp, unemployment, and pensions don't count as earned income.
Please read this TurboTax FAQ for additional information on qualifying for the Earned Income Tax Credit
(EITC): What are the
qualifications for the Earned Income Credit (EIC or EITC)?
{Edited 3/24/19 | 11:58am]
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