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@Taxlady44 wrote:

but the EIC worksheet does not add back in the $10,200 when determining eligibility for EIC

The IRS directive is that the exclusion could not bring a taxpayer into EIC.  or increase their EIC.

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Why do you think there is an add-back?  What IRS directive?

EIC uses "Earned Income" (so unemployment does not affect that) and AGI (the $10,400 reduces AGI).  As far as I know, there is no provision for the calcuation to use a Modified AGI that adds back unemployment.

As for your clients that had EIC denied, you need to find out WHY the IRS denied it.