EIC Investment Income

Forum|Forum|1 year ago
April 9, 2025
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What exactly is included in EIC Investment Income?

Is interest from an overseas account with income from sources outside of USA considered investment income for EIC?

Do I need to subtract losses from selling stocks in order to calculate Investment income from stocks? Or the losses are not considered for EIC investment income?

Will Turbotax do these calculations automatically?

Ask the Experts - Tax Due - April 2025

mglauner

Are you referring to what income is included when calculating eligibility for the Earned Income Credit? If so, the credit is based on your Adjusted Gross Income, with lower income receiving a larger credit. Here's detailed info from the IRS, and Qualifications for Earned Income Credit.

As a US citizen or resident, you report your world-wide income, so you would report gains/losses from selling foreign stock, and bank interest. These amounts will be used in calculating your Adjusted Gross Income. If you paid foreign tax on the income, you can claim a Foreign Tax Credit.

Yes, TurboTax will do the calculations for EIC automatically, as well as the Foreign Tax Credit. It is best to step through the interviews for these sections and read the questions carefully.

@MSAL678

MSAL678Author

Thanks, I am referring to the investment income below:

Your investment income must not exceed $11,000.
You must have earned income from a job or self-employment.
You cannot file Form 2555 or 2555-EZ, which are designed for those claiming foreign earned income and exclusions.

MinhT1

Investment income comprises interest, including tax-exempt interest, dividends, capital gains, royalties and rents from personal property, and returns from passive activities—that is, business pursuits in which the person is not actively involved.

This IRS document in paragraph 6 has a worksheet which allows to calculate your investment income for the purpose of the EIC.

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