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jesse-chettle
New Member

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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IsabellaG
Expert Alumni

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?

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.

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1 Reply
IsabellaG
Expert Alumni

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?

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.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

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