Understanding the IRS's definition of earned income is essential as it not only impacts tax liability but also eligibility for certain tax credits, such as the Earned Income Tax Credit (EITC).

This article was expert reviewed by Lisa Niser, EA, an enrolled agent and tax advisor. The Earned Income Tax Credit (EITC) can reduce taxes and increase refunds for low- to moderate-income workers ...

1 Gross income includes all of the same items that make up earned income, such as wages, salaries, commissions, and bonuses, as well as business income net of expenses if the individual is ...