Why is my unemployment income being used in the calculation of my Earned Income Credit (EIC)? - TurboTax® Customer Care & Support

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Why is my unemployment income being used in the calculation of my Earned Income Credit (EIC)?

Why is my unemployment income being used in the calculation of my Earned Income Credit (EIC)?

Updated: 11/17/2007

Article ID: 1361

Basically, it has to do with your adjusted gross income (AGI). Because your income exceeds the maximum amount allowed by the IRS, the IRS uses your AGI instead of the earned income calculated for EIC purposes, to figure the credit. Check out the Tax Tip below for a more detailed description of this calculation.

Simply put, TurboTax is calculating this correctly.

Tax Tip

If you income is over $6,750 ($8,750 married filing joint) or $14,850 ($16,850 married filing joint, with 1 or more qualifying children) the IRS uses your adjusted gross income from Line 38 of Form 1040 to calculate your EIC. If your income does not exceed these amounts, your EIC is calculated on the EIC worksheet, which does not include unemployment

For additional information on Earned Income Credit, visit the IRS Web site at http://www.irs.gov/individuals/article/0,,id=96466,00.html

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