Earned Income

• According to the IRS, earned income is taxable and generally earned from working. When an employer pays you for working, for example, or you earn money through self-employment, you are generating earned income that qualifies for the EIC. Since unemployment benefits are not earned, they do not qualify for the credit.
  
  

Earned Wages

• Wages, salaries and tips earned from an employer are considered eligible income for claiming the EIC on your tax returns, as are the net earnings from self-employment.
  
  

Other Earned Income

• Other earned income that can qualify for the earned income credit include union strike benefits and long-term disability payments, if you're receiving those disability payments before your minimum retirement age.
  
  

Non-Qualifying Income

• The IRS does not consider unemployment benefits to be earned income, thus they cannot be used to claim the credit. Other forms of non-earned income include child support, alimony, pensions and interest or dividend payments.