EITC different with Turbo Tax than IRS calculator
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chris B22
Returning Member

EITC different with Turbo Tax than IRS calculator

I finished my taxes and submitted them. After looking over my finished document I noticed the EITC looked a little low considering my situation. sub 22,000  AGI with 2 kids and married. I inputted the exact information on my taxes that I used with turbo tax and the IRS estimated I should receive 5,920, but turbo tax only calculated 3,584. I'm not sure what to do. 

9 Replies
macuser_22
Level 15

EITC different with Turbo Tax than IRS calculator

Did you use both your earned income AND AGI and use the lower of the two as tax law requires?

 

You can get to the Earned Credit Interview by entering "eic" (without the quotes) in the Tools -Search Topics box.

Earned Income Credit (EIC) is paid on a bell curve - starts low for a low income, increases to the maximum as income increases, then phases out as income increases still further until it is gone at the maximum income. You only get the maximum EIC if your income is about midway between no income and the maximum income.

EIC is calculated both on the amount of earned income and your AGI and you get the lessor of the two.

EIC will be found on line 27 on the 1040 form.

The credit is calculated on the EIC Worksheet that can be viewed in the forms mode in desktop versions and print all forms and worksheets in the online versions.

2020 Earned Income and Adjusted Gross Income (AGI) must each be less than:
$50,954 ($56,844 married filing jointly) with three or more qualifying children
$47,440($53,330 married filing jointly) with two qualifying children
$41,756 ($47,646 married filing jointly) with one qualifying children
$15,820 ($21,710 married filing jointly) with no qualifying children

The credit will vary from $0 to the maximum depending on income and AGI see EIC table.
Tax Year 2020 maximum credit:
$6,620 with three or more qualifying children
$5,290 with two qualifying children
$3,584 with one qualifying child
$538 with no qualifying children


Investment income must be $3,650 or less for the year.

EIC Table page 48
https://www.irs.gov/pub/irs-pdf/i1040gi.pdf

You must be at least 25 if you do not have a qualifying child, and under 65 years of age at the end of 2020.

See IRS Pub 596 for complete information:
http://www.irs.gov/publications/p596/index.htmlYou can get to the Earned Credit Interview by entering "eic" (without the quotes) in the Tools -Search Topics box.

Earned Income Credit (EIC) is paid on a bell curve - starts low for a low income, increases to the maximum as income increases, then phases out as income increases still further until it is gone at the maximum income. You only get the maximum EIC if your income is about midway between no income and the maximum income.

EIC is calculated both on the amount of earned income and your AGI and you get the lessor of the two.

EIC will be found on line 27 on the 1040 form.

The credit is calculated on the EIC Worksheet that can be viewed in the forms mode in desktop versions and print all forms and worksheets in the online versions.

2020 Earned Income and Adjusted Gross Income (AGI) must each be less than:
$50,954 ($56,844 married filing jointly) with three or more qualifying children
$47,440($53,330 married filing jointly) with two qualifying children
$41,756 ($47,646 married filing jointly) with one qualifying children
$15,820 ($21,710 married filing jointly) with no qualifying children

The credit will vary from $0 to the maximum depending on income and AGI see EIC table.
Tax Year 2020 maximum credit:
$6,620 with three or more qualifying children
$5,290 with two qualifying children
$3,584 with one qualifying child
$538 with no qualifying children


Investment income must be $3,650 or less for the year.

EIC Table page 48
https://www.irs.gov/pub/irs-pdf/i1040gi.pdf

You must be at least 25 if you do not have a qualifying child, and under 65 years of age at the end of 2020.

See IRS Pub 596 for complete information:
http://www.irs.gov/publications/p596/index.html

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
chris B22
Returning Member

EITC different with Turbo Tax than IRS calculator

Thank you for the link to the IRS table.  Yes my AGI is the lower of the two incomes (21,835).  According to the Table from the IRS I should received 5,920 compared to the 3,584 from line 27 on my 1040. I don't know if this is a factor, but my son was born middle of May 2020. I don't know if that means he qualifies for the full year or only partially, which may result in less of a credit. 

macuser_22
Level 15

EITC different with Turbo Tax than IRS calculator


@chris B22 wrote:

Thank you for the link to the IRS table.  Yes my AGI is the lower of the two incomes (21,835).  According to the Table from the IRS I should received 5,920 compared to the 3,584 from line 27 on my 1040. I don't know if this is a factor, but my son was born middle of May 2020. I don't know if that means he qualifies for the full year or only partially, which may result in less of a credit. 


Full year - a child born anytime during the year is deemed to have lived with you the entire year.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
chris B22
Returning Member

EITC different with Turbo Tax than IRS calculator

Given this information and the table from the IRS how should I dispute this with Turbo tax. 

macuser_22
Level 15

EITC different with Turbo Tax than IRS calculator

Dispute what?  I know of not errors in the calculations.

 

What is on line 1 on your 1040 form and what is on line 11?

 

What is your filing status and how many Qualifying Child dependent children do you have?

 

That information should give the the same results on the EIC table that TurboTax calculates (TurboTax uses the same table).

 

EIC Table page 48
https://www.irs.gov/pub/irs-pdf/i1040gi.pdf

 

 

 

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
chris B22
Returning Member

EITC different with Turbo Tax than IRS calculator

Line 1: 24,992

Line 11: 21,835

Married filing Jointly 

Qualifying child dependents (2) : ages 3 and 1 

Turbo tax calculated my EIC as 3,584  according to line 27 on my 1040

The IRS calculator and the IRS table shows I should receive 5,920 as seen on page 51 of the IRS EIC table married filing jointly, 2 kids, making at least 21,800 but less than 21,850

 

 

chris B22
Returning Member

EITC different with Turbo Tax than IRS calculator

I believe I figured out the problem. On my 1040 it lists my two children under dependents as well as on the Additional child tax credit Schedule 8812. However on the Earned Income Credit Form, it only shows one of my children. Not sure how turbo tax let this slide even though I entered both children along with social security numbers in the beginning of the application. The 3,584 amount lines up with my income level and married status if we had one child (which is what the form shows on my taxes).  How do I ammend my taxes to make sure turbo tax counts both children in the EIC formula?

dawn02091982
Returning Member

EITC different with Turbo Tax than IRS calculator

Sounds Like you may have selected that your child was living with you less than 6 months of the year in the US or you selected the checkbox for "Social Security Number Not Valid For Employment", I would select the amend option and go back and check your dependents info. Make sure that the checkbox "Social Security Number Not Valid For Employment" is NOT checked and also go check and make sure you have selected they lived with you all year. A child that is born in that year is counted as living with you all year. Here's a link on how to complete an amended return: https://ttlc.intuit.com/community/amending/help/how-do-i-amend-my-return/01/27439

SweetieJean
Level 15

EITC different with Turbo Tax than IRS calculator

EITC is calculated two ways: (1) based on earned income, and (2) based on AGI.  You then get the lower of the two. But it looks like you may be getting the amount for only 1 child, not 2.  Was one of them born in 2020? If so, be sure to say that they lived with you all year.

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