turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

For 2020 will a 401K early withdrawal affect EITC eligibility?

Will Care’s act early 401k withdrawal amount be added to EITC AGI?
Connect with an expert
x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

3 Replies

For 2020 will a 401K early withdrawal affect EITC eligibility?

The withdrawal from a 401(k) is a taxable event so the taxable portion of the distribution will be added to your other income and taxed at your current tax rate.  Yes, it will affect your EITC eligibility.

For 2020 will a 401K early withdrawal affect EITC eligibility?

Because a 401(k) withdrawal is considered unearned income, if the amount is more than $3650, you will be disqualified from the earned income credit even if your total income is not over the absolute limit. These rules and limitations were not modified by the CARES act.

For 2020 will a 401K early withdrawal affect EITC eligibility?

Unemployment is not considered investment income and will not disallow the credit by itself however it does come into play for income limitations. 

 

See pages 5&6 :

https://www.irs.gov/pub/irs-pdf/p596.pdf

 

https://ttlc.intuit.com/community/credits-and-deductions/help/what-are-the-qualifications-for-the-ea...

message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question
Manage cookies