I've been on unemployment for going on 6 months is that gonna affect my extra earned com-credit

[DoninGA]

Unemployment income is not Earned Income so is not included.

Go to this IRS website for EIC qualifications - https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/do-i-qualify-for-earned-...

[Critter]

It will affect the calculation of the EIC as it is considered taxable income even though it is not earned income since the EIC is calculated on the earned income amount & the AGI.  

[Mokz12]

So the answer is yes then?  Unemployment does go toward your AGI and therefore we will not get the EITC?

So confusing that everywhere on the IRS page it says "Unemployment does not count toward your Earned Income yet Turbo Tax puts it with your AGI and we don't qualify.  How can it not count toward Earned Income but yet disqualify us for Earned Income Tax Credit?

[JohnW152]

When computing EIC, you need to take two amounts into account: earned income, and your adjusted gross income.

When you've figured out your earned income -- which doesn't include unemployment benefits -- go to the Earned Income Credit (EIC) Table in the Instructions for Forms 1040 and 1040-SR and find the EIC amount based on your filing status and number of qualifying children.

Next, take your adjusted gross income -- your AGI, on line 11 of Form 1040, which includes your unemployment benefits -- and find the EIC amount based on your AGI.

Whichever amount is lower is the amount of your credit.  That's it.

Please see the TurboTax Help article What are the qualifications for the Earned Income Credit (EIC or EITC)? and Worksheet A—2020 EIC—Line 27 in Instructions for Forms 1040 and 1040-SR for more information.

[Mokz12]

Thanks for the response, my Earned Income is under the amount allowed to earn the EIC but in Turbo Tax, since my AGI is above the limit it says I don't qualify.  Not sure how to adjust it, it just says my AGI is above the EITC limit but it only is because of the unemployment I've received.  I only made 10k before Covid hit and I was furloughed / unemployed.  Appreciate the help / responses.

The article states.... "In addition, both your earned income and Adjusted Gross Income (AGI) may not exceed:

$

15,820 if you're not claiming a qualifying child ($21,710 if filing jointly);"

So it doesn't appear to be one or the other to earn the EIC but if either is above then I wouldn't qualify.  So as a single male no children earning 10k through work and then getting unemployment, I do not qualify.  Just odd it says unemployment wouldn't affect qualification but it does.

[KrisD15]

It is a bit confusing. 

Unemployment is not considered as Earned Income, but could affect your Adjusted Gross Income and that could affect the Earned Income tax Credit. 

The link below makes it a bit clearer: 

TurboTax explains Earned Income Tax Credit and Unemployment

[Mokz12]

They should call it the Adjusted Gross Income Tax Credit then.

Unemployment isn't earned income but will negate the earned income tax credit because it increases your AGI.... LoL 😂 nice one IRS.

Thank you for all your help 🙂