2021 UI Income being adding to earned income to calculate EIC

Forum|Forum|4 years ago
February 21, 2022
4 replies
9 views

Why is 2021 UI Income being adding to earned income to calculate EIC income when Client has both Unemployment income and wages? I know UI is added to AGI (fed taxable income) but IRS instructions state it is not used to calculate EIC. What am I missing? I do not see where AGI income is used to calculate EIC but only used to verify AGI is under limits.

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Best answer by TaxGuyBill

Pay close attention to #3 and #5.

https://www.irs.gov/pub/irs-pdf/i1040gi.pdf#page=44

Just-Lisa-Now-

Intuit Community Champion

EITC uses both earned income and AGI in its calculation. If you follow the money down the EITC worksheet you should see how its calculated.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

S

singh

Level 6

Unearned income not calculated for EIC and CTC. Go to Federal Information Worksheet. Scroll down to

Part III. Click on " Earned Income Credit worksheet". This will take you to the details of Earned income and unearned income calculation for EIC and CTC, which is auto fill. eg. If my earned income is $30,000 and Unemployment is $9000.00 only $30,000 is calculated on the worksheet for EIC/CTC.

T

TaxGuyBillAnswer

Level 15

Pay close attention to #3 and #5.

https://www.irs.gov/pub/irs-pdf/i1040gi.pdf#page=44

HFINANCIALAuthor

Level 3

So I have learned that when AGI is greater than Earned Income, the AGI is used to determine the EIC. Doesn't happen too often, but it happened to this client. Thanks everyone!!!

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