Disqualifying Income

AAA

DEFINITION of 'Disqualifying Income'

A type of income that can disqualify an otherwise eligible taxpayer from receiving the earned income credit. Disqualifying income consists of both taxable and tax-free interest, dividends, net income from rents and royalties, net capital gains and net passive income not received as a result of self-employment.

INVESTOPEDIA EXPLAINS 'Disqualifying Income'

Taxpayers are only disqualified from receiving the earned income credit if they receive more than a certain amount, which is adjusted annually for inflation.

RELATED TERMS
  1. Income

    Money that an individual or business receives in exchange for ...
  2. Earned Income Credit - EIC

    A tax credit in the United States which benefits certain taxpayers ...
  3. Self-Employment Tax

    Money that a small business owner must pay to the federal government ...
  4. Investment Income

    Income coming from interest payments, dividends, capital gains ...
  5. Working Tax Credit (WTC)

    A tax credit offered to low-income individuals working in the ...
  6. Buffett Rule

    A tax rule proposed in 2011, by President Barack Obama, stating ...
Related Articles
  1. IRA Contributions: Deductions and Tax ...
    Taxes

    IRA Contributions: Deductions and Tax ...

  2. Taxing Times For Divorced Parents
    Taxes

    Taxing Times For Divorced Parents

  3. Bond Funds Boost Income, Reduce Risk
    Mutual Funds & ETFs

    Bond Funds Boost Income, Reduce Risk

  4. Give Your Taxes Some Credit
    Taxes

    Give Your Taxes Some Credit

comments powered by Disqus
Hot Definitions
  1. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  2. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  3. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  4. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  5. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
  6. Limit-On-Open Order - LOO

    A type of limit order to buy or sell shares at the market open if the market price meets the limit condition. This type of ...
Trading Center