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Glossary

Earned income

Money you make from working a job or running a self-employment business.

Earned income is money you get paid for working. It includes wages, salaries, tips, and income from self-employment or a business you own.

Earned income matters for many benefits programs because it affects whether you qualify and how much help you can get. Programs that look at earned income include SNAP (food assistance), Medicaid (health coverage), WIC (nutrition help for pregnant people and young children), TANF (cash assistance), child care assistance, LIHEAP (help paying energy bills), and unemployment insurance.

Some programs treat earned income differently. For example, SNAP counts 20% of your earned income as a deduction when figuring out your benefits. Other programs may have limits on how much you can earn and still qualify.

Remember: applying for benefits is free, and only the program agency decides if you qualify based on your actual income.

Programs where this matters

Child Tax CreditInternal Revenue ServiceThe Child Tax Credit is a federal tax credit that may lower the tax you owe if you are raising qualifying children.EITCInternal Revenue ServiceThe EITC is a federal tax credit for people who work and have low to moderate income. It may lower your tax and add to your refund.LIHEAPHHS Administration for Children and FamiliesLIHEAP helps households with low income pay heating and cooling bills, and may help in an energy crisis such as a shut-off notice.MedicaidCenters for Medicare & Medicaid ServicesMedicaid is free or low-cost health coverage run by each state with federal funding, for children, adults, pregnant people, older adults and people with disabilities.SNAPUSDA Food and Nutrition ServiceSNAP gives monthly benefits on an EBT card to help households with low income buy food.WICUSDA Food and Nutrition ServiceWIC gives healthy foods, nutrition education and breastfeeding support to pregnant women, new mothers, infants and young children with low income.Child Care AidHHS Administration for Children and FamiliesChild care assistance helps families with low income pay for child care so parents can work, look for work, or go to school or training.TANFHHS Administration for Children and FamiliesTANF gives cash help and support services to families with children who have low income. Each state runs its own program.UnemploymentUS Department of Labor / state workforce agenciesUnemployment insurance pays temporary cash benefits to workers who lose their jobs and meet their state's rules.