topic What is considered "investment income"? I need to withdraw from my 403b for a down payment. Will this count as the 3600 limit in investment income for the EITC? in Retirement tax questions

What is considered "investment income"? I need to withdraw from my 403b for a down payment. Will this count as the 3600 limit in investment income for the EITC?

lilimaye — Tue, 06 Oct 2020 13:39:05 GMT

Re: What is considered "investment income"? I need to withdraw from my 403b for a down payment. Will this count as the 3600 limit in investment income for the EITC?

Critter-3 — Tue, 06 Oct 2020 14:49:21 GMT

No it will not HOWEVER it will be included in your AGI which could put you out of the EIC range.

Re: What is considered "investment income"? I need to withdraw from my 403b for a down payment. Will this count as the 3600 limit in investment income for the EITC?

lilimaye — Tue, 06 Oct 2020 14:56:11 GMT

Thank you! I'm planning to take out 4k for part of my down payment. So that will not put me out of the EIC range, but it said on the irs website that you can't have more that $3600 in investment income, and that was where I got a little confused!

Thank you for your reply!

Re: What is considered "investment income"? I need to withdraw from my 403b for a down payment. Will this count as the 3600 limit in investment income for the EITC?

Critter-3 — Tue, 06 Oct 2020 15:05:25 GMT

Do I Qualify for EITC? https://www.irs.gov/pub/irs-pdf/p5334.pdf

Step One: Answer All of the Following Questions
1. Do you (and your spouse if filing a joint return) have a social security number valid for employment issued by the due date of
your return (including extensions)?
2. Is your filing status married filing jointly, head of household, qualifying widow(er) or single?
3. Have you (and your spouse if married) been a U.S. citizen or resident alien all year or are you or your spouse treated as a
resident alien all year by filing a joint return?
4. Are you NOT claiming a foreign earned income credit (Form 2555 or Form 2555-EZ)?
5. Is your investment income (which includes interest, dividends, rents, royalties, and capital gains) $3,600 or less?
6. Do you have earned income for the year?
7. Are you NOT the qualifying child of another filer?

Re: What is considered "investment income"? I need to withdraw from my 403b for a down payment. Will this count as the 3600 limit in investment income for the EITC?

lilimaye — Tue, 06 Oct 2020 15:19:08 GMT

Thanks! I saw that, I'm just not overly familiar with the financial world, so I wanted to be sure that didn't include 403b withdrawals and they were just being called something else.

Re: What is considered "investment income"? I need to withdraw from my 403b for a down payment. Will this count as the 3600 limit in investment income for the EITC?

Critter-3 — Tue, 06 Oct 2020 16:02:50 GMT

Pensions are not considered investment income for EIC purposes even if the funds were invested in the market and made dividends and cap gain. Only investment income OUTSIDE of a retirement account are counted.

Re: What is considered "investment income"? I need to withdraw from my 403b for a down payment. Will this count as the 3600 limit in investment income for the EITC?

lilimaye — Tue, 06 Oct 2020 16:22:27 GMT

Thank you so much! I appreciate you!