Capital Loss for Reducing Investment Income to get Earned Income Credit

[PortlandEagle]

In 2020 I was trying to get my investment income under the limit so that I could claim the Earned Income Tax Credit.  I knew that my dividends would put me over the investment income limit.  So I sold some investments at a capital loss in order to reduce my total investment income and get under the limit, so that I could qualify for the Earned Income Tax Credit.

Despite the total of my dividends and capital loss  (1040 lines 2b, 3b and 7)  putting me under the published limit, TurboTax is telling me that my investment income is over the limit for the EITC.  What is going on?  Am I not allowed to reduce my investment income this way?  

[MinhT1 · Accepted solution]

For the purposes of determining the eligibility for the EITC, capital losses do not reduce your investment income.

Please see the worksheet included in this IRS document.

[PortlandEagle]

Thank you for the answer. That explains it. I am disappointed, but I appreciate your help.