Federal Earned income credit is $0, but state is still crediting it

[geosen]

My federal Earned Income Tax Credit on line 27 is zero. But when the state calculated the EIC, it credited the full amount as if line 27 were not zero. Shouldn't the state also be zero since it is only a percentage of the federal EIC?

[rjs]

What state? Every state has different rules.

If it's New Jersey, what you are seeing is common. New Jersey allows EIC in some cases where the federal tax does not allow it. So the New Jersey EIC is not necessarily "only a percentage of the federal EIC."

[geosen]

This is a simple return for my college-age son, so after compiling the taxes, I ran the numbers through the IRS's direct file system rather than pay the electronic filing fees. The federal numbers were identical to what TT calculated. However, when the Direct File system transferred the information to NJ (which was zero Federal EIC, NJ did not give the Earned Income Credit.) I'm unsure if something didn't transfer correctly or if the NJ direct file system calculates things differently. The EIC has a fairly big impact on his refund.

[rjs]

If you claim your son as a dependent on your tax return (or if anyone else claims him) he is not eligible for the New Jersey EIC.

If you got different results in TurboTax and IRS Direct File you might have answered questions about being claimed as a dependent differently.

We cannot help you with IRS Direct File here. If you have a problem with Direct File contact Direct File support.