EITC MISCALCULATED FOR 2019

[i-shavers17]

My EITC was miscalculated by $4,000. I received $1,000 although I should have received $5,000. I can longer file an amended tax return for 2019. Is there anyway I can sue TurboTax for is owed to me due to their technical error? 

[RobertB4444]

TurboTax has an accuracy guarantee.  If you had a problem because of a TurboTax error then TurboTax will refund your money.

Here is where to apply for that.

In 2019 and 2020 there was a lot of confusion because of the government stimulus payments.  If someone did not receive one in the mail or deposited into their bank account then they were supposed to add it to their tax return and they would receive it as part of their tax refund.  

A lot of people made the mistake of adding it to their tax refund even though they had already received the stimulus payment and then the IRS removed the stimulus from their refund because they had already gotten it.  $4000 sounds like that might be the case for you.  You may want to have someone review your return and any letters that you have received from the IRS to try and determine if that is what happened to you.

@i-shavers17 

[i-shavers17]

Thank you! But I'm confused by your answer, I never added the stimulus income to my return. TurboTax included my unemployment income to calculate my EITC, which means the EITC that I received was understated. I spoke with the Tax Audit Department and they informed me they will not correct TurboTax's mistake and that it's too late to file an amendment for 2019. Then, I contacted the IRS and the representative mentioned that I can file an amendment but can only complete one via paper, not online. TurboTax was clueless on how to help me. The Tax Audit Department at TurboTax could have informed me that all I had to do was file an amendment via paper. I'll not be using TurboTax again. 

[xmasbaby0]

@i-shavers17 It sounds like you misunderstood how EIC is calculated.   You say you received unemployment compensation for 2019---as well as some income earned from working?  But you want the EIC to be calculated only on the income earned from working and for the unemployment  amount to be disregarded?  It does not work that way.   The unemployment was  part of the AGI for your 2019 income, and was used in the calculation of the amount of EIC you could get for that tax year.   

[i-shavers17]

I just spoke to an Enrolled Agent at TurboTax, today, who mentioned the EITC should have be based on earned income for 2019. I have the screenshot of the live chat as proof. Are you an Enrolled Agent? 

[i-shavers17]

Her name was Ursula G. So the Enrolled Agent who have higher experience than you is wrong? If there was an option to attach the screenshot to this reply, I would. 

[i-shavers17]

According to the Congressional Research Service, "The amount of the credit a taxpayer receives is based on the prior year's earned income and family composition. In other words, the 2023 EITC is based on 2023 earned income, but will not be paid until tax returns are filed in 2024." If for 2023, EITC is based on earned income, how come EITC for 2019 isn't based on earned income? I literally went to another tax preparation company and was informed I was underpaid my EITC. Today, even the IRS agreed and informed me to file an amendment for 2019 and they will issue an additional refund for the difference. 

[i-shavers17]

I'm not confused, I have a BS in Accounting and I  worked as a tax preparer. EITC use to be based on earned income or AGI, whichever is higher. But that has changed. TurboTax needs to be updated on tax laws. 

[xmasbaby0]

The IRS interactive assistant for EIC is no longer available for tax year 2019.  But it still might be helpful for you to use the one for 2023 and just plug in some amounts so that you can see that the amount of your AGI --- and thus your EIC--- is affected by receiving unemployment and/or other types of income in addition to the income earned from your job.

https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/use-the-eitc-assistant

[i-shavers17]

Lastly, according to the IRS, "Earned income does not include amounts such as pensions and annuities, welfare benefits, unemployment compensation, worker's compensation benefits, or social security benefits. Unemployment benefits are not earned income and can't be used to claim the EITC." 

[xmasbaby0]

Yes----that is all true---but that does not mean that your unemployment does not "count" toward your AGI.  It counts.   If you ONLY had unemployment you would not get any EIC based on the unemployment.  But you seem to have income earned from working and some unemployment.  You want the unemployment to not "count"---but it does.   It is not "earned " income---but it is income, and it adds to your AGI.    

And...did you use my suggestion to plug in some numbers to that EIC assistant to see for yourself how the EIC and your AGI is affected when you enter unemployment income?

[VolvoGirl]

Right but they add into your AGI.  Both your earned income and AGI have to be less than the table.   Have you looked at the 2019 pub 596?
https://www.irs.gov/pub/irs-prior/p596--2019.pdf