topic approx how much is from the IRA? in Retirement tax questions

Is a distribution from an inherited IRA considered investment income for purposes of EITC?

tlgabe — Sat, 01 Jun 2019 17:17:43 GMT

I have a special needs brother. In the past he qualified for earned income tax credit. I am trying to figure out why no credit this year. Is a distribution from an inherited IRA considered investment income? It is not listed on the investment income smart worksheet, and the worksheet shows he is eligible for the EITC. So I cannot figure out what else would be limiting him from getting the EITC. On the 1040, Line 17, Turbo Tax printed "NO" for EITC. He has about $7,000 of earned income and interest and dividends well below the $3,500 investment income threshold.

approx how much is from the IRA?

MichaelL1 — Sat, 01 Jun 2019 17:17:45 GMT

approx how much is from the IRA?

total income must be below $15,270.

MichaelL1 — Sat, 01 Jun 2019 17:17:46 GMT

total income must be below $15,270.

Approx 6000 from Inherited IRA

tlgabe — Sat, 01 Jun 2019 17:17:47 GMT

Approx 6000 from Inherited IRA

Is it total income or AGI?

tlgabe — Sat, 01 Jun 2019 17:17:48 GMT

Is it total income or AGI?

The tax year 2018 Earned income and adjusted gross income...

MichaelL1 — Sat, 01 Jun 2019 17:17:49 GMT

The tax year 2018 Earned income and adjusted gross income (AGI) must each be less than $15,270.

Ugh. Earlier version of Turbo Tax showed he received the...

tlgabe — Sat, 01 Jun 2019 17:17:51 GMT

Ugh. Earlier version of Turbo Tax showed he received the EITC (did not have the limit at the total income level). So I used the info to determine distribution from a special needs trust. I have some flexibility, but of course undistributed is then taxed at the trust with unfavorable rates. Not that much money but for him, $400 matters!

Just realized earned income IS less than $15,270. And AG...

tlgabe — Sat, 01 Jun 2019 17:17:52 GMT

Just realized earned income IS less than $15,270. And AGI is lower. Total income is $16,000 however (reduced by IRA contribution to get AGI below $15,000).

I still don't understand why turbo tax is limiting the EI...

tlgabe — Sat, 01 Jun 2019 17:17:54 GMT

I still don't understand why turbo tax is limiting the EIC. Earned Income and AGI are below $15,270. I looked at paper forms and answered the questions and it appears the EIC should be allowed. How can I find out if this is a bug in the turbo tax software?

Did you accidentally say he could be claimed as a dependent?

SweetieJean — Sat, 01 Jun 2019 17:17:55 GMT

Did you accidentally say he could be claimed as a dependent?

No, did not accidentally check the dependent box, but in...

tlgabe — Sat, 01 Jun 2019 17:17:56 GMT

No, did not accidentally check the dependent box, but in the process of looking for checked boxes, I found it! There was a place to answer "none of the above" and now that it is checked, my brother gets the EITC as my research showed he should. Thank you to all who replied!

The tax year 2018 Earned income and adjusted gross income...

MichaelL1 — Sat, 01 Jun 2019 17:17:57 GMT

The tax year 2018 Earned income and adjusted gross income (AGI) must each be less than $15,270.

The IRA in not considered Investment Income.