Sometime around 10:00pm last night I finally found the problem. When I was entering the amounts for the 1099-NEC I mistakenly started entering the IRA contribution ($7k) in as information related to a 401k/Keogh plan. I realized my mistake and went back and removed those values while in the TT step by step mode. To all appearances they were gone... zeroed out. But TT failed to remove the IRS form (8862) for this calculation! It left my original entries on the form and continued to use these erroneous values throughout in calculating my wife's earned income; reducing it by not only the $7k but by even more since it had tried to "maximize" this deduction.
It was only after I removed the 1099-NEC entry by deleting it in step by step AND went into the form view, found the form for the EIC and deleted that that the program finally worked.
All in all I estimated I wasted in excess of 6 hours trying to diagnose and fix this problem. Although I realize it was initiated by initial mistake of confusing our IRA contribution with a 401k contribution, it is outrageous that one part of TT "fixed" the problem on the surface but left this bomb in place by not deleting the 8862 when it had been zeroed out.
