EITC from "Undocumented Sources" - Unable to E-File?

Forum|Forum|5 years ago
February 1, 2021
4 replies
35 views

Client has a net loss of $6k on his Schedule C, but we are electing to still pay SE taxes under the "Nonfarm Optional Method"... which triggers the EITC to populate.

There is an e-file error stating that the return is ineligible to e-file due to "all earned income for the Earned Income Tax Credit (EITC) is calculating from undocumented sources" ... what?! Not sure what that even means...? Is there a way around this error so I CAN e-file? Mail is so backed up.... Thanks!

ProSeries Professional

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T

TaxGuyBill

I would guess that if you disable error-checking when you e-file, it will go through fine.

C

caleyAuthor

Level 2

I will try that, but I think it will still not allow e-file....error also says "these rules are set forth by the IRS Electronic Tax Administration"

L

Lukepccpa

Level 4

Does your taxpayer not have dependents? That seems to be what triggers the error. A taxpayer who qualifies for the EITC with only self employment income and no kids. I've run into it many times over the years, so it's not a software error in my opinion. They're screening for fraudulent EITC claims by requiring manual filing versus the return zipping through the e-file system.

BobKamman

Level 15

The 2019 earned income is too high to qualify on the lookback rule?

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