By answering this, you're telling the program how to complete certain EIC information on your state return.
According to the Instructions for Form IT-201, if the IRS is computing your federal EIC, you'd write "EIC" in the box to the left of the money column of line 65, and leave the money column blank on line 65. You'd also need to complete lines 67 through 75 of Form IT-201, but leave lines 76 through 80 blank.
The programming reflects these actions.