Definitions

2.1. The term "eligible taxpayer" means:

2.1.1. An unmarried individual with a federal adjusted gross income of $10,000.00 or less;

2.1.2. A husband and wife who file a joint return with a total federal adjusted gross income of $10,000.00 or less; or

2.1.3. A husband or wife who files a separate return and who has a federal adjusted gross income of $5,000.00 or less.

2.2. For the purposes of this deduction, the term "earned income" includes:

2.2.1. Wages, salaries, tips and other employee compensation as set forth on the eligible taxpayer's W-2 form; and

2.2.2. Net earnings from self-employment activity as defined in Section 1402(a) of the Internal Revenue Code minus any deduction available to the taxpayer pursuant to Section 164 of the Internal Revenue Code.

2.3. For the purposes of this deduction, the term "earned income" excludes:

2.3.1. Income attributable to a taxpayer on the basis of a divorce decree or separation agreement to distribute community property;

2.3.2. Income received from a pension, IRA distributions, 401(k) distributions, payments or distributions from a deferred compensation plan, retirement annuity, or any other retirement plan;

2.3.3. Any annuity; and

2.3.4. Income received by a taxpayer while that taxpayer was an inmate at a penal institution.