According to the current 2021 IRS form 1040 instructions, you cannot claim the earned income credit, if earned income plus social security income equals more than a total of $21,400. Google search assures me that is still true.
p. 38, top of second column, All Filers, If in 2021: No children who have valid SSNs lived with you, is the amount on Form 1040 or 1040-SR, line 11, less than $21,430 (27,380 if married filing jointly)? If no, STOP You can't take the credit.
Then on p. 44, the worksheet, you have to enter your earned income, enter the amount from Form 1040 line 11, if the amounts are not the same, go to question 5. Question 5 asks if yu have no qualifying children, is the amount less than $11,650 (and other conditions). If no, look up the amount on line 3 in the EIC Table to find the credit, and when I do, the credit is $0, because line 11 is more than $21,400.
On 1040, to get to line 11, you sum on line 9 your social security benefits, some other things, and your earned income from line 1. This is your adjusted gross income.
I ignored this statement in the instructions and used the worksheet in the 1040 instructions booklet to compute my earned income amount, it told me that if my form 1040 line 11 (adjusted gross income) is higher than my earned income, I had to use the line 11 amount instead, and then told me I am eligible for 0 dollars based on that amount. The amount of the earned income tax credit drops to $0 at $21,400.
Turbo Tax, Tax Act, eFile, and FreeTaxUSA have all given me a $660 Earned Income Credit anyway. The first three gave no hint as to why. FreeTaxUSA told me my total income is my earned income even though it reflected on the same page my social security income. Social security income is not taxable, but it does count for the Earned Income credit.
The chat assistant at Turbo Tax could not give me a satisfactory explanation or resolution. She made me go through that part of the form again three times. She told me how she thought I should be able to remove the credit from my return but that means did not exist. Then she said sorry I can't remove it. I had to threaten to report her to the company CEO before she would report the matter as a bug.
Since the rules could not state more clearly that combined income must be under $21,400 to claim the earned income tax credit, if I claim it anyway I would be disqualified from claiming it again for years. That can cost Turbo Tax big time as well in tax audits and having to pay peoples taxes for them because it was was Turbo Tax's mistake.
Obviously I am not going to PAY for Turbotax deluxe if I can't use Turbo Tax to submit an accurate return.
If anyone knows that the tax rule changed and only the tax software companies know of it, which happened last year with the premium tax credit, please tell me now.
If there is a way to delete the claim to the tax credit I don't qualify for in Turbo Tax that neither I nor the chat assistant could see, please tell me that, too.
Thanks!
