Capital Gains Sole Income

[Rios]

Cap gains is my sole income this year, or rather it will be if I realize some gains before the end of the year.  Last year I had earned income (W2) for two months of work before I quit my job to care for my wife full time and I received a very large refund totaling over half of what I made for those two months due to having two dependents and all the child credits that equaled more than what I made. 

Are capital gains treated as earned income in the sense if I realize some gains before the end of the year and have my deductions for my wife and I and our children and all the child credits offset those gains, could I get a refund?

My understanding is that Cap gains are treated as earned income so I was thinking of trying to duplicate last year’s refund by realizing some gains but only enough to have nothing due and get money back like last year.

Note: I made approx $24k those couple months on my W2 last year and received over $10k back, I only had about $2k withheld. 

Thanks!

[DoninGA]

Capital gains are Not earned income, they are unearned income.

If you have no earned income to be reported on your tax return then you will not be eligible for any tax credits based on earned income, such as the Child Tax Credit or the Earned Income Tax Credit.

[Rios]

Thank you. 

Question Part 2: I assist my old job from time to time with some IT things but have refused payment from them as it usually takes me a min or two to fix their issues. If they were to pay me and I had a 1099 from them at the end of the year for $50, would I then qualify for tax credits and see a refund?

Thanks!

[DoninGA]

Use these IRS Tools to see if you would be eligible for any tax credits based on your estimated earned income -

For the Child Tax Credit - https://www.irs.gov/help/ita/does-my-childdependent-qualify-for-the-child-tax-credit-or-the-credit-f...

For the Earned Income Tax Credit (2018 but also valid for 2019) - https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/use-the-eitc-assistant

[Carl]

I had a 1099 from them at the end of the year for $50,

If reported as self-employment income in box 7, or as "other income" in box 3 of the 1099-MISC, it's not enough to make a difference on anything at all. You definitely would not pay self-employment tax on that income since it's less than $400, and at best, you *might* pay one whole dollar of income tax on that $50 of earned income. But I seriously doubt you'd even pay that.

I made approx $24k those couple months on my W2 last year

If that's all the earned income you made, it was all tax free based solely on your $24K standard deduction you got when you filed a joint return. So if you have less than that in "earned" income for 2019, it's a waste of your time and effort to even consider getting any credits of any type for 2019, if those credits are based on "earned" income.

[xmasbaby0]

It takes a minimum of $2500+  of income earned from working to get even the smallest amount of the refundable portion of the child tax credit.  The refundable amount of the CTC is calculated at 15% of the amount ABOVE $2500.  So if you earned, say, $3000 --  your "additional child tax credit" would be $75.00.  (15% of $500)

So unless you actually worked in 2019 and have income earned from working, as others have said already, you are not eligible to receive any of the child-related credits.  Getting a 1099Misc for $50 or reporting cash earnings of $50 will not help you.  Sorry.