Why is my earned income credit so low

[justin2-]

When I look at the EIC chart it tells me I should get $2626.00 credit. On my tax return it tells me $187.00. Why the big discrepancy?

[rjs]

Your EIC is not just taken directly from a chart. There is a multi-step worksheet that has to be used to calculate the amount of the EIC. The worksheet is different depending on which form your tax return is on: 1040, 1040A, or 1040EZ. For Form 1040 there are two different worksheets, depending on what types of income you have. You can find the worksheet in the IRS instructions for the form that your tax return is being filed on.

If you do not file Schedule C or Schedule SE, then in most cases the calculation consists of looking up the credit amount in the chart twice - once using your earned income and once using your Adjusted Gross Income (AGI). Your EIC is whichever amount is less. However, if your AGI is less than a certain amount, depending on your filing status and whether you have a qualifying child, then you just use the amount from the chart based on your earned income.