(a) Allowance of credit
In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to the lesser of—
(1) 6.2 percent of earned income of the taxpayer, or
(2) $400 ($800 in the case of a joint return).
(b) Limitation based on modified adjusted gross income
(1) In general
The amount allowable as a credit under subsection (a) (determined without regard to this paragraph and subsection (c)) for the taxable year shall be reduced (but not below zero) by 2 percent of so much of the taxpayer’s modified adjusted gross income as exceeds $75,000 ($150,000 in the case of a joint return).
(2) Modified adjusted gross income
For purposes of subparagraph (A),1 the term “modified adjusted gross income” means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section 911, 931, or 933.
(c) Reduction for certain other payments
The credit allowed under subsection (a) for any taxable year shall be reduced by the amount of any payments received by the taxpayer during such taxable year under section 2201, and any credit allowed to the taxpayer under section 2202, of the American Recovery and Reinvestment Tax Act of 2009.
(d) Definitions and special rules
For purposes of this section—
(1) Eligible individual
(A) In general
The term “eligible individual” means any individual other than—
(i) any nonresident alien individual,
(ii) any individual with respect to whom a deduction under section 1 is allowable to another taxpayer for a taxable year beginning in the calendar year in which the individual’s taxable year begins, and
(iii) an estate or trust.
(B) Identification number requirement
Such term shall not include any individual who does not include on the return of tax for the taxable year—
(i) such individual’s social security account number, and
(ii) in the case of a joint return, the social security account number of one of the taxpayers on such return.
For purposes of the preceding sentence, the social security account number shall not include a TIN issued by the Internal Revenue Service.
(2) Earned income
The term “earned income” has the meaning given such term by section 32(c)(2), except that such term shall not include net earnings from self-employment which are not taken into account in computing taxable income. For purposes of the preceding sentence, any amount excluded from gross income by reason of section 112 shall be treated as earned income which is taken into account in computing taxable income for the taxable year.
This section shall not apply to taxable years beginning after December 31, 2010.
(Added Pub. L. 111–5, div. B, title I, §1001(a), Feb. 17, 2009, 123 Stat. 309.)
References in Text
Sections 2201 and 2202 of the American Recovery and Reinvestment Tax Act of 2009, referred to in subsec. (c), are sections 2201 and 2202 of Pub. L. 111–5, which are set out as notes under section 6428 of this title.
Pub. L. 111–5, div. B, title I, §1001(f), Feb. 17, 2009, 123 Stat. 312, provided that: “This section [enacting this section, amending sections 6211 and 6213 of this title and section 1324 of Title 31, Money and Finance, and enacting provisions set out as notes under this section], and the amendments made by this section, shall apply to taxable years beginning after December 31, 2008.”
Treatment of Possessions
Pub. L. 111–5, div. B, title I, §1001(b), Feb. 17, 2009, 123 Stat. 310, provided that:
“(A) to whom a credit is allowed against taxes imposed by the possession by reason of the amendments made by this section for such taxable year, or
“(B) who is eligible for a payment under a plan described in paragraph (1)(B) with respect to such taxable year.
Refunds Disregarded in the Administration of Federal Programs and Federally Assisted Programs
Pub. L. 111–5, div. B, title I, §1001(c), Feb. 17, 2009, 123 Stat. 311, provided that: “Any credit or refund allowed or made to any individual by reason of section 36A of the Internal Revenue Code of 1986 (as added by this section) or by reason of subsection (b) of this section [set out as a note above] shall not be taken into account as income and shall not be taken into account as resources for the month of receipt and the following 2 months, for purposes of determining the eligibility of such individual or any other individual for benefits or assistance, or the amount or extent of benefits or assistance, under any Federal program or under any State or local program financed in whole or in part with Federal funds.”