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posted Jun 5, 2019 10:24:43 PM

Does Schedule E income for an LLC that is taxed as an S-Corp count towards earned income for the EIC? What about income from a partnership that is taxed as a partnership?

I can't seem to find where to include this but I definitely earn it by working everyday so it seems that both should be included.

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1 Best answer
Expert Alumni
Jun 5, 2019 10:24:44 PM

Your distributive share from a Sub-S Corporation is not considered earned income. That's because it's considered to be investment income. If you did work for the Sub-S and received compensation, you should have been paid wages, and it should be reported on a W-2.

Partnership K-1 income for business income,  that is subject to Self Employment tax, is considered to be earned income.

1 Replies
Expert Alumni
Jun 5, 2019 10:24:44 PM

Your distributive share from a Sub-S Corporation is not considered earned income. That's because it's considered to be investment income. If you did work for the Sub-S and received compensation, you should have been paid wages, and it should be reported on a W-2.

Partnership K-1 income for business income,  that is subject to Self Employment tax, is considered to be earned income.