I filed my federal return using Turbo Tax which determined I am not eligible for the earned income credit. Now I just received a letter from the IRS telling me I am eligible. The letter includes Form 15112 EIC Worksheet and based on the questions on the worksheet it looks like I should be eligible. Turbo tax asked questions about my 2019 earned income to help determine eligibility, but this worksheet does not ask any questions about 2019 income.
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If it appears that you’re eligible for EIC for tax year 2021, according to the Earned Income Credit Worksheet (CP 27), You should fill it out and mail it as requested in the IRS’ letter.
Since the form only addresses eligibility for the credit, as opposed to the computation of the credit, you should also attach a letter asking the IRS to use the earned income from whichever year – 2019 or 2021 – will result in a higher EIC amount for you.
You can also compute the EIC amount yourself to include an amount in your letter, using the instructions at Lines 27a, 27b, and 27c—Earned Income Credit (EIC) in the 2021 Instruction 1040, but it’s a pretty complicated calculation.
Or, you could also go into the TurboTax program and start an amended return using both 2019 and 2021 earned income to see if you could come up with the EIC amount yourself, but you don’t want to actually file an amended return, since the letter doesn’t ask you to do that.
Please see the IRS’ Understanding Your CP27 Notice for more information.
If it appears that you’re eligible for EIC for tax year 2021, according to the Earned Income Credit Worksheet (CP 27), You should fill it out and mail it as requested in the IRS’ letter.
Since the form only addresses eligibility for the credit, as opposed to the computation of the credit, you should also attach a letter asking the IRS to use the earned income from whichever year – 2019 or 2021 – will result in a higher EIC amount for you.
You can also compute the EIC amount yourself to include an amount in your letter, using the instructions at Lines 27a, 27b, and 27c—Earned Income Credit (EIC) in the 2021 Instruction 1040, but it’s a pretty complicated calculation.
Or, you could also go into the TurboTax program and start an amended return using both 2019 and 2021 earned income to see if you could come up with the EIC amount yourself, but you don’t want to actually file an amended return, since the letter doesn’t ask you to do that.
Please see the IRS’ Understanding Your CP27 Notice for more information.
I also just received the CP 27 and it turns out I am eligible for a $1,502 credit! I went back into Turbotax to see where I might have made a mistake. As you saw, it only asks a question about 2019 income and then says I am not eligible. This is a huge mistake on something that should be easy for Turbotax to get right based on the personal income I entered along with my income. Please fix. I would not have known about this without a letter from the IRS telling me how to file for the credit.
Same situation - Turbotax says not eligible yet this appears to be incorrect. I've signed/returned the CP27 notice and look forward to the EIC refund.
NOTE the IRS only says you "MAY" be eligible for the EIC so the TT program may be correct but it is based on your entries so if you did not enter the correct 2019 earned income amount the IRS is giving you a chance to correct this data entry error if you did make one. Read the notice carefully and respond as directed ...
https://www.irs.gov/individuals/understanding-your-cp27-notice
if your 2021 income exceeds this table, then using 2019 income to calculate EITC will not yield a better outcome.
if your 2021 does NOT exceed the numbers in this table, then using 2019 income to calcualte EITC MAY yield a better outcome (the math is complicated)
Single / HOH/ MFS / Qual Widow | Married – Joint | |
0 Children | $9,800 | $9,800 |
1 Child | $10,600 | $10,600 |
2 Children | $14,950 | $14,950 |
3 Children | $14,950 | $14,950 |
Same here, Turbotax did not recognize the credit and received the letter from the IRS. Reviewing the form, eligible for the credit. Very frustrated with TurboTax as it overlooked the opportunity of the tax credit which is a substantial amount of money.
@bkrummel - curious, I know the IRS is sending letters says you MAY be eligible for the credit. Would you mind posting your AGI (Line 11) and the number of children you have...... those two numbers determine whether you are eligble for EITC and would confirm if TT really calculated this incorrecfly as it was all automated, or the IRS is just sending out letters to create false hope.
and did the letter mention 2020 or 2021 tax return?
thank you,
For the 2020 return, if the taxpayer had unemployment that later became fully or partially non taxable which means they are now eligible for a credit they were not eligible for on the original return and/or they fail to enter the correct 2019 AGI to get the credit thus the IRS sends the form 15111 to alert the taxpayer they "may" be eligible for a credit they did not already apply for. This is in the taxpayer's favor as it saves them from amending a return they may not know it needs to be amended.
@Critter-3 - good points, the complexity of the last minute American Rescue Plan act, makes it look like Turbo Tax software missed the EITC credit when that could have only occured if the OP submitted the tax return before Turbo Tax updated the software to reflect the March, 2021 law changes......
But that is a 2020 tax return issue and not a 2021 tax return issue.
I guess it is possible for low income individuals (see the table I posted above) that failed to include their 2019 AGI, to be eligible for EITC based on their 2019 income, but that is an input error and not a Turbo Tax software calculation issue.
Did you got your EIC? I filled the form after getting cp27 notice. I sent mail May 25 but didn’t get back my Earned Income Credit.
Did you got your EIC refund?
still waiting
I'm waiting from 8 weeks...
@shayento wrote:
I'm waiting from 8 weeks...
The IRS is severely behind in the processing of tax returns.
Go to this IRS website for the status of filed tax returns - https://www.irs.gov/newsroom/irs-operations-during-covid-19-mission-critical-functions-continue
As of July 1, 2022, we had 11.4 million unprocessed individual tax year 2021 returns. Of these, 1.9 million returns require error correction or other special handling, and 9.5 million are paper returns waiting to be reviewed and processed. This work does not typically require us to correspond with taxpayers but does require special handling by an IRS employee so, in these instances, it is taking the IRS more than 21 days to issue any related refund and in some cases this work could take 90 to 120 days. If a correction is made to any Recovery Rebate Credit, Child Tax Credit, Earned Income Tax Credit or Additional Child Tax Credit claimed on the return, the IRS will send taxpayers an explanation. Taxpayers are encouraged to continue to check Tax Season Refund Frequently Asked Questions.
How long you may have to wait: The IRS understands the importance of timely processing of tax returns and refund issuance. We have processed all error free returns received prior to December 2021 and continue to work the returns that need to be manually reviewed due to errors. We are continuing to reroute tax returns and taxpayer correspondence from locations that are behind to locations where more staff is available, and we are taking other actions to minimize any delays. Tax returns are opened and processed in the order received. As the return is processed, whether it was filed electronically or on paper, it may be delayed because it has a mistake including errors concerning the Recovery Rebate Credit and the Child Tax Credit, is missing information, or there is suspected identity theft or fraud. If we can fix it without contacting you, we will. If we need more information or need you to verify that it was you who sent the tax return, we will write you a letter. The resolution of these issues could take 90 to 120 days depending on how quickly and accurately you respond, and the ability of IRS staff trained and working under social distancing requirements to complete the processing of your return.
What you should do: In most instances, no further action is needed but you may check Where’s My Refund? or you can view your account. If you filed electronically and received an acknowledgement, you do not need to take any further action other than promptly responding to any requests for information. If you filed on paper, check Where’s My Refund? If it tells you we have received your return or are processing or reviewing it, we are processing your return, but it may be under review. If you filed before October 2021 and Where’s My Refund? does not have any information, your return has been opened but work on it has not begun. We’re working hard to get through the carryover inventory. Please don’t file a second tax return or contact the IRS about the status of your return.
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