EITC for singles in 2021

[lmtax]

From IRS:
For 2021, the EITC is generally available to filers without qualifying children who are at least 19 years old with earned income below $21,430; $27,380 for spouses filing a joint return. The maximum EITC for filers with no qualifying children is $1,502, up from $538 in 2020. There are also special exceptions for people who are 18 years old and were formerly in foster care or are experiencing homelessness. Full-time students under age 24 don't qualify. There is no upper age limit for claiming the credit if taxpayers have earned income. In the past, the EITC for those with no dependents was only available to people ages 25 to 64.

PROSERIES Support:  I just filed tax for a client who was 23 and was a full time student.  I even entered his 1098-T and marked him as a full-time student.  Software still qualifies him for EITC on his 1040!!!   Is this correct or software is all messed up?  

[qbteachmt]

This not ProSeries Support. It's a peer user community on the internet.

Here is an IRS link, with topics and bookmark links:

https://www.irs.gov/newsroom/get-ready-for-taxes-bookmark-irsgov-resources-and-online-tools-to-use-b...

EITC is one of the Interactive Tax Wizards available.

[clr600]

Is the client a dependent. If not this is why the program is giving the client eitc.

[taxiowa]

I think QB and CLR are missing the instructions which say that if specified student under age 24 they do not qualify for EIC even if not claimed as a dependent.  I think I would just answer on info worksheet that they are not qualified for EIC until Intuit makes the correction.

[TaxGuyBill · Accepted solution]

At first glance, the software seems set up correctly, but you are the one that missed checking the box on the EIC worksheet.

[taxiowa]

Bill is correct.  There is a box on EIC worksheet to designate that you are a specified student.  It would probably help if Intuit highlighted it or automatically checked it when you designated that you were a specified student elsewhere on student info worksheet.

[lmtax]

I agreed. 

There should be highlights to be checked off.

And if i put in 1098-t, marked it full-time student...that along should've triggered the disqualification for eitc. What's better proof of a full-time student then 1098-t?!

[lmtax]

I understand there's a eitc worksheet...but after putting in 1098-t information, clearly marked full-time student on the student worksheet, the $1k refundable credit showed up on 1040.....and Intuit still allow eitc?!!

That's the thing I am trying to point out to Intuit and to our fellow software users to be aware. 

[TaxGuyBill]

The requirement for EIC is that the student is at least a half-time student for at least 5 months (including parts of 5 months).

The 1098-T box only shows if the student is at least a half-time student for at least one academic period, which may not necessarily be 5 months.  So the 1098-T box can't automatically check the box.

And as the way the software is set up now, the EIC worksheet just has a check box for "yes" for half time student.  So the way it is set up, the software CAN'T really highlight anything because there is only ONE box (it would need to have two boxes, so you could make a choice).

Although you are right that checking the full-time student box on the information would be able to automatically check the EIC box, that could mislead people to think that less than full-time student could not check the box (again, the requirement is to be at least half-time).

As tax professionals it is OUR job to make sure the tax return is correct.  While the software may be helpful to avoid some mistakes, we can't rely on the software to take us step-by-step through everything.  We need to know the rules, and apply those rules to the tax return.