beckyc50
Level 1
12-07-2019
10:25 AM
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Why does Subchapter S earnings not contribute to earnings for child tax Credit?
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abctax55
Level 15
12-07-2019
10:25 AM
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"EARNED income" means subject to SE tax (in general).
K-1 income flowing from an S-Corp isn't.... sorta the reason ( or one of them...) for forming an S-Corp.
HumanKind... Be Both
Level 15
12-07-2019
10:25 AM
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They should have a W2 from the S-Corp if they are doing work for it...the W2 would have earned income.
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abctax55
Level 15
12-07-2019
10:25 AM
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"should".....
:smiling_imp:
HumanKind... Be Both
Level 13
12-07-2019
10:25 AM
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I sometimes question this myself......
qbteachmt
Level 15
12-07-2019
10:25 AM
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"Active participant" = Employee = Wages = qualify for the Earned Income Credit, because W2 Wages = earned income. The amount on the K-1 is the amount passed through as taxable to the shareholder, not their Earned amount. Their Earned amount as part of payroll for the corporation was part of Expenses for the corporation.
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Level 13
12-07-2019
10:25 AM
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That is a good definition. Thanks!!