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Taxpayers who receive non-taxable compensation must enter “NEI" on the dotted line to the left of line 56 on the Form 1040 and to the left of line 21B on the Form 1040A, even if they cannot claim the credit, Mr. Petrie said.
In addition to having earned income, you must have a child living with you for more than half the year, your principal home must be in the United States, and if you are married you must file a joint return, he said.
Information on eligibility, restrictions and requirements on earned income credit is available in free IRS Publication 596, “Earned Income Credit.” To get a copy, call (800) 424-3676, or for more information call the IRS at (800) 424-1040.
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