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posted May 11, 2021 12:57:22 AM

3 kids, 2020 income lower than 2019 - TT switched to 2019 income to calculate EIC

but the number as 2019 earned income pulled automatically into 2020 return is some number that I do not recognize being the EI for 2019 - even though I have looked as per the instruction "where to look for 2019 EI".

 

Hypothetically:

 

w2 income - 130000

Schedule 1 deductions - 26000

Taxable income - 104000 (AGI)

Standard deduction - 24000

Taxable income - 80000 (is this the EI) - if it is, why TT is putting say 95000 in 2020 tax return as EI from 2019?

 

Am I missing something?

 

0 4 438
4 Replies
Expert Alumni
May 11, 2021 6:51:24 PM

Yes, earned income is money that was earned rather than investments. Which looks like it would be $130,000 from your example but your schedule 1 losses may include income that was being worked for- at a loss, to bring you down to $95k.

Level 3
May 11, 2021 7:11:22 PM

Okay but how is 95k calculated? Schedule 1 losses only bring 130000 to 104k.  

Expert Alumni
May 12, 2021 1:54:31 PM

@TXDAD Don't confuse the form total with all the moving pieces inside of it.

 

sch 1 is comprised of many different items. There could $90,000 in losses from one thing and $20,000 in gains for something else and so on. There are so many parts and pieces, it would be easy to have the loss from active income on sch 1 affecting EIC while other passive activities are changing sch 1.

 

 

Level 3
May 13, 2021 5:36:18 AM

I guess I am going to leave the default number TT is pulling. Regardless of what number I put there, the outcome never changes i.e. the refund doesn't change.  Thank