Earned Income Tax Credit 2021 tax year with Unemployment included in AGI

[lons]

I'm filing married-jointly and we qualify for the earned income tax credit. I was unemployed and got unemployment. My husband worked. TurboTax included my unemployment into our AGI (EITC is based off of AGI), even though unemployment is NOT earned income (IRS website), therefore it's drastically reducing how much money that we get back from the earned income tax credit. How can TurboTax exclude unemployment from EITC, so that we get the correct $ back? 

[Bsch4477]

EIC calculation is based not only on earned income but is also limited by AGI which includes unemployment income. So TurboTax is calculating your EIC correctly. 

[JamesG1]

It is possible that unemployment income reduced your Earned Income Tax Credit because the EITC calculation includes an adjusted gross income component and an earned income component in the calculation.

Use the IRS EITC Assistant here to verify the calculation in your tax return.

This IRS publication outlines the seven rules that apply to all taxpayers to qualify for the Earned Income Tax Credit.  They are:

• Your adjusted gross income (AGI) must be less than:
•       $51,464 ($57,414 for married filing jointly) if you have three or more qualifying children who have valid SSNs,
•       $47,915 ($53,865 for married filing jointly) if you have two qualifying children who have valid SSNs,
•       $42,158 ($48,108 for married filing jointly) if you have one qualifying child who has a valid SSN, or
•       $21,430 ($27,380 for married filing jointly) if you don't have a qualifying child who has a valid SSN.
• You must have a valid Social Security Number.
• If you are separated from your spouse and not filing a joint return, you must meet certain rules.
• You must be a US citizen or resident alien all year.
• You cannot file IRS Form 2555 Foreign Earned Income.
• Your investment income must be $10,000 or less.
• You must have earned income.

@lons

[lons]

On my TurboTax earned income credit worksheet:

Line 7 - Earned income = 35,470

Line 8 - Enter credit from EIC table for the amount on line 7 = 3,873

Line 9 - AGI = 52,220 (includes my unemployment)

Line 10 - One or more qualifying children, is the amount on line 9 less than 25,000? Marked "No". Enter credit from EIC table for the amount on line 9 = 345

Line 11 - Earned income credit = 345 

Enter line 11 amount on Form 1040, line 27.

*We have 2 qualifying children. I'm confused by line 10, because I haven't seen this question on the IRS website. Why is it asking this? Is this correct?

[Bsch4477]

The worksheet is showing that your EIC is being limited by your AGI just as tax law mandates.