Does housing allwnce count twd earned income? Box 1 doesn't incl HA and is about $44K. However, I don't qualify for EIC bc my earned income is $73K (HA=$34,800). Help!

[AggieJen]

My AGI last year was about $40K.  My income in box 1 this year is about $44K.  However, TT says I don't qualify for EIC because my earned income is $73K (I guess it is including the $34,800 HA)?  Is this correct?  Should HA be included in my earned income total? I qualified for EIC last year with all the same housing allowance in place and about the same income so I don't understand why I'm not qualifying this year.

[MageeM]

A housing allowance provided to a minister as part of the minister’s pay generally is not subject to income tax but is included in net earnings from self-employment. For that reason, it is included in earned income for EITC, unless you have an approved Form 4361 or Form 4029.

For more info, see this article: https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/special-eitc-rules

[AggieJen]

 Thank you so much for such a quick response! Just to clarify, is it correct that, between my box one entry of $44K+ and my box 14 entry of $34,800 for housing, that my total earned income is about $73,000 and, therefore, I do not qualify for EIC since I am above the $54,884 limit?

[MageeM]

You are very welcome! Basically, because you're exceeding the total income to qualify for EIC, you won't be able to claim it this year.