Can the investment income exceed a specific amount for the EITC eligibility?

The eligibility for the Earned Income Tax Credit (EITC) is influenced by investment income limitations. The specific rule states that to qualify for the EITC, an individual's investment income must be below a certain threshold. For tax year 2023, that threshold is set at $11,000. Therefore, if an individual has investment income that exceeds this amount, they would not be eligible for the EITC.

This regulation ensures that the benefit is targeted toward low to moderate-income earners, and the limit on investment income helps to prevent higher-income individuals, who may not need this assistance, from qualifying for the credit. Thus, investment income's restriction to remain below $11,000 is a crucial aspect of maintaining the integrity of the EITC program. This makes the choice indicating that investment income must be below $11,000 the correct understanding of the criteria for EITC eligibility.