Problem 7-6 Earned Income Credit (LO 7.2) Diane is a single taxpayer who qualifies for the earned income credit. Diane has two qualifying children who are 3 and 5 years old. During 2021, Diane's wages are $18,900 and she receives dividend income of $900. Diane's 2019 earned income was lower than 2021. Earned Income Credit Phase-Out Ranges Other than joint filers Joint filers Number of Qualifying Children Phaseout Phaseout Phaseout Phaseout Begins Ends Begins Ends None 1 2 3 or more: $11,610 $21,430 $17,560 $27,380 19,520 42,158 25,470 48,108 19,520 47,915 25,470. 53,865 19,520 51,464 25,470 57,414 Calculate Diane's earned income credit using the EIC table in Appendix B. 5,661 X Feedback Check My Work The earned income credit (EIC or sometimes EITC) is available to qualifying individuals with earned income and AGI below certain levels. Qualifying taxpayers can receive a refundable EIC even in situations when they have no filing requirement, owe no tax, and had no income tax withheld. Proper calculation of the EIC requires a taxpayer to answer three important questions: (1) Does the taxpayer qualify for the EIC? (2) Does the taxpayer have a qualifying child? (3) What is the amount of the EIC?