@dmertz
I don't understand the calculation. If W-2 box 1 wages are $16,970, and schedule SE net profit from self-employment is $35,980, why is "compensation" less than $15,000? The housing allowance is "earned income" even though it is not subject to federal income tax.
[Edited to add: I can understand that because the $16,970 was not subject to social security withholding by the employer, there might be a need to adjust it downward by 92% (more or less). But the result should still be more than $15,000.]
For example, clergy are eligible for EITC based on their wages plus their housing allowance (minus the adjustment for deductible SE tax).
https://www.irs.gov/publications/p517
Earned income.
Earned income includes your:
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Wages, salaries, tips, and other taxable employee compensation (even if these amounts are exempt from FICA or SECA under an approved Form 4029 or 4361); and
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Net earnings from self-employment that are not exempt from SECA (you don't have an approved Form 4029 or 4361) that you report on Schedule SE (Form 1040), line 3, with the following adjustments.
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Subtract the amount you claimed (or should have claimed) on Schedule 1 (Form 1040), line 15, for the deductible part of your SE tax.
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Add any amount from Schedule SE (Form 1040), line 4b and line 5a.
