EIC Credit Calculation when SSI involved.

[amylcpa]

Has anyone else had an issue where ProSeries calculates the EIC and does not take into account the SSI of the client?  Just want to confirm that I am calculating this correctly and the client does NOT qualify for the EIC even though the program is calculating it.  

My client is 58 years old.  Has W-2 $3036 wages as part of Third Party Sick Pay.  Receives SSI for disability $15331. Lastly, receives inherited IRA distribution $2064.

ProSeries is calculating that he will receive the EIC.  I think the calculation is wrong, but want confirmation from other professionals.

[BobKamman]

He does not receive SSI.  That is Supplemental Security Income, for poor people.  He receives Social Security disability benefits, sometimes called SSDI.  

If the sick pay is taxable (not from a policy on which he paid the premiums) then it qualifies in the EIC calculation.  

[amylcpa]

No other year has calculated it as such.  Just this year, 2020.  All other years (exactly the same income)..... the EIC did NOT calculate.  When using the IRS EIC tool you put in the Net Benefits from SSA-1099 and he does not qualify.

Maybe my terminology was wrong.  He receives a SSA-1099 with Benefits of 15331 in Box 5.

[Just-Lisa-Now-]

@TaxGuyBill  <--- he's really good with these kinds of things!

[TaxGuyBill]

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@amylcpa wrote:

ProSeries calculates the EIC and does not take into account the SSI of the client

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Social Security income doesn't directly affect EIC.  If the Social Security is taxable, it would affect AGI, which CAN affect EIC.

I don't see anything in your post that would disallow EIC.  If the program did not allow it in prior years, perhaps AGI was high enough that it disallowed EIC.

[BobKamman]

He's always received $3,036 a year in sick pay, reported on a W-2?

[amylcpa]

Yes, His numbers were exactly the same in 2019.  And EIC was not allowed then.  When I go through the IRS EIC calculator it says he does not qualify either.  In the IRS EIC calculator you have to put the entire box 5 amount from SSA-1099.

[TaxGuyBill · Accepted solution]

As far as I can tell, the IRS calculator is wrong.  It is including the full amount of Social Security as part of AGI, which is wrong.

From everything that you have said, the taxpayer qualifies.  The bigger question is why was the program not allowing it in prior years.  Did ANYTHING change (filing status, other income, dependency, living in the US, etc.)?

[amylcpa]

Absolutely nothing else changed from prior years.  Or at least 2019.  Income is exactly the same.  There were years where dependency was an issue, but not in 2019 or 2020.  Thank you for all your help!