EIC Worksheet B Simplified for Easy Use
The Earned Income Credit (EIC) is a tax credit designed to help low-to-moderate-income working individuals and families. To qualify for the EIC, taxpayers must meet certain requirements and use the correct forms. One of these forms is the Schedule EIC, which is used to report the EIC on a tax return. However, before completing Schedule EIC, taxpayers must first complete Worksheet B, also known as the Earned Income Credit Worksheet.
What is Worksheet B?
Worksheet B is used to calculate the earned income amount, which is the income earned from working for someone else or from running a business or farm. This worksheet is used by taxpayers who have earned income and want to claim the EIC. The worksheet is divided into several parts, each dealing with a different type of income.
How to Complete Worksheet B
To complete Worksheet B, follow these steps:
Part 1: Earned Income from Working for Someone Else
- List your employer’s name and address
- Enter the amount of wages, salaries, and tips you received from your employer
- Enter the amount of any unemployment compensation you received
Part 2: Earned Income from Self-Employment
- List the name and address of your business or farm
- Enter the net earnings from self-employment
- Enter the amount of any business expenses you can deduct
Part 3: Earned Income from Farming
- List the name and address of your farm
- Enter the net earnings from farming
- Enter the amount of any farm expenses you can deduct
Part 4: Calculating Earned Income
- Add up the amounts from Parts 1, 2, and 3
- Enter the total amount on Line 1 of Schedule EIC
Important Notes:
📝 Note: You can only include income that is subject to income tax. Do not include income that is not subject to income tax, such as tax-free allowances or gifts.
📝 Note: If you have a qualifying child, you may need to complete additional forms, such as Form 8862, to claim the EIC.
Example of Completed Worksheet B
| Part 1: Earned Income from Working for Someone Else | Amount |
|---|---|
| Employer's Name and Address | John Doe, 123 Main St, Anytown, USA |
| Wages, Salaries, and Tips | $30,000 |
| Unemployment Compensation | $5,000 |
| Total | $35,000 |
| Part 2: Earned Income from Self-Employment | Amount |
| Business Name and Address | Jane Smith, 456 Elm St, Othertown, USA |
| Net Earnings from Self-Employment | $20,000 |
| Business Expenses | $5,000 |
| Total | $15,000 |
| Part 3: Earned Income from Farming | Amount |
| Farm Name and Address | Bob Johnson, 789 Oak St, Farmtown, USA |
| Net Earnings from Farming | $10,000 |
| Farm Expenses | $2,000 |
| Total | $8,000 |
| Part 4: Calculating Earned Income | Amount |
| Total Earned Income | $58,000 |
Conclusion
Completing Worksheet B is an important step in claiming the Earned Income Credit. By following these steps and using the worksheet, taxpayers can ensure they are reporting their earned income correctly and receiving the credit they are eligible for.
What is the Earned Income Credit (EIC)?
+The Earned Income Credit (EIC) is a tax credit designed to help low-to-moderate-income working individuals and families.
Who is eligible for the EIC?
+To be eligible for the EIC, taxpayers must meet certain requirements, including having earned income and meeting income limits.
What is Worksheet B used for?
+Worksheet B is used to calculate the earned income amount, which is the income earned from working for someone else or from running a business or farm.
