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February 8, 2022
Question

Why do I not qualify for the EITC? Line A of W-2 is less than the $53,865 Married/ Jointly with 2 kids.

  • February 8, 2022
  • 2 replies
  • 0 views
Possibilities that I can think of: Sold house w/ profit of $75k and wife received fed unemployment benefits of $11,000.  The UE puts us over the limit but from my understanding, this isn't counted

2 replies

Employee
February 8, 2022
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Employee
February 8, 2022

EITC is calculated two ways: (1) based on earned income (unemployment doesn't count), and (2) based on AGI (it does).  You then get the lower of the two.

JohnB5677
February 8, 2022

These wages are included in the EIC calculation.  It does not mention Capital Gain and unemployment is specifically excluded.

Check line 11 of your 1040 for the AGI.  As you stated it should be below $53,865.

 

Earned Income and Earned Income Tax Credit (EITC) Tables

  • Wages, salary, or tips where federal income taxes are withheld on Form W-2, box 1
  • Income from a job where your employer didn’t withhold tax (such as gig economy work) including:
    • Driving a car for booked rides or deliveries
    • Running errands or doing tasks
    • Selling goods online
    • Providing creative or professional services
    • Providing other temporary, on-demand or freelance work
  • Money made from self-employment, including if you:
  • Benefits from a union strike
  • Certain disability benefits you got before you were the minimum retirement age
  • Nontaxable Combat Pay (Form W-2, box 12 with code Q)

Earned income does not include:

  • Pay you got for work when you were an inmate in a penal institution
  • Interest and dividends
  • Pensions or annuities
  • Social Security
  • Unemployment benefits
  • Alimony
  • Child support
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