You should check to see if your K-1 from your 1120S is marked as passive in error. Passive income is not "earned" income for this credit. If it is marked as passive, the Form 1065 loss is offsetting your W-2 earned income and denying the credit.
In your return, go to your K-1 for the S-Corp. Click to Update it and progress through the questions until you get to the Did You Participate? screen and answer Yes. Continue through the K-1 entry and verify your credit.
@JakeG
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