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seccam
Level 1

If you have earned income credit because of earned income in 2019 - but no EIC in 2021 - you can not e-file?

Helping a friend ...tried to file on taxact.com she had earned income in 2019 but no earned income in 2021 from she sources mentioned below - (she is using 2019 income to qualify for EIC in 2021) so taxact says -

 

'This return does not qualify for e-filing.

The return contains the earned income credit. When that is the case the IRS requires that at least one of the following sources of earned income be in the return if it is to be e-filed: household employee income, foreign earned income, Form W-2, Form 1099-R, Form 4137, Form 8919, Schedule C, Schedule F, or Schedule K-1 (1065) with earned income. This return contains none of those sources of earned income and therefore cannot be e-filed.'

 

Is this same with turbotax online account or only taxact has this problem where e-file could be rejected.

12 Replies
Critter-3
Level 15

If you have earned income credit because of earned income in 2019 - but no EIC in 2021 - you can not e-file?

Ok ... sounds like you are trying to file a zero income return which cannot be efiled ... so here is the simple  trick ... just enter $1 of bank interest to allow the efiling. 

seccam
Level 1

If you have earned income credit because of earned income in 2019 - but no EIC in 2021 - you can not e-file?

no its not zero income. It has income like capital gains , unemployment but no earned income 

so is this problem specific to taxact ? or TurboTax will have same issue? 

I have already started on turbotax and clicked on pay on federal refund - Because she is going to get some refund ..about 200$

 

but till now Turbotax - did not stop me like Taxact did  

Critter-3
Level 15

If you have earned income credit because of earned income in 2019 - but no EIC in 2021 - you can not e-file?

PLEASE do NOT pay an extra fee to have the TT fees withheld from the federal refund.  And that option will not be allowed if the refund comes from a refundable credit like the EIC based on the 2019 income. 

 

If her AGI is $73K or less please use one of the IRS FREE FILE options and mail in the return if needed.  https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free

seccam
Level 1

If you have earned income credit because of earned income in 2019 - but no EIC in 2021 - you can not e-file?

I did not know if we use refundable credit to pay for TT premier - there is extra fee?

so we have to choose credit card payment to pay upfront ?

Yes AGI is 73K or less and I checked ..for crypto only 2 free file options available 

1. freetaxusa.com and 2. https://www.freefilefillableforms.com/

 

But both options have restrictions on efiling attachments  like statements for form 8949(to give explanation to IRS about cost basis etc)

In this case she has 74 pages for  - form 8949--option C of 1099-B(no receipt of 1099-B)  and 16 pages for option C of  1099-B pages (basis not reported) 

so yes we can efile but we have to manually print all these pages and send to IRS by mail 

 

so I was looking for another option that we can do everything online  -

Please advise what is the solution in our case?

VolvoGirl
Level 15

If you have earned income credit because of earned income in 2019 - but no EIC in 2021 - you can not e-file?

The extra $45 fee is if you want to have the fees deducted from your refund.   So try to pay upfront with a credit card to avoid the extra fee.  And then your refund will come directly to you from the IRS and not go though the 3rd party bank to have the fee taken out.  It might be quicker.  Refunds seem to be getting hung up at the SBTPG bank.

 

How to review your fees
https://ttlc.intuit.com/community/charges-and-fees/help/how-do-i-review-my-fees-in-turbotax-online/0...

 

What is Refund Processing?
https://ttlc.intuit.com/community/choosing-a-product/help/what-is-refund-processing-service/00/25889

 

 

 

seccam
Level 1

If you have earned income credit because of earned income in 2019 - but no EIC in 2021 - you can not e-file?

So do you have any suggestion other than Turbotax 

I know 2 options ..freetaxusa and freefillableforms but for all those 8949 pages(about 100 pages) - I am discouraged going that route

 

At the same time I tried with taxact and they said u cant efile - not sure what will happen with Turbotax ...

I dont want to get in to drama of refund etc if I cant efile..

 

I am only using Turbotax to avoid printing and mailing those pages - and with turbotax I still have to mail - no point paying the fees

 

VolvoGirl
Level 15

If you have earned income credit because of earned income in 2019 - but no EIC in 2021 - you can not e-file?

Why can't you efile with Turbo Tax?  I think you can.  

Critter-3
Level 15

If you have earned income credit because of earned income in 2019 - but no EIC in 2021 - you can not e-file?

 

You can quickly enter this manually.  Your brokerage statements should include a summary of your transactions, grouped by sales category.

 

There are seven possible "Box" designations that indicate the holding period (Long/Short Term) and the reporting status.  These are the only ones you have to summarize. If you want to manually enter your 1099-B as the summaries.

 

  1. Tell us about your 1099-B sales for this BOA account
    1. Answer the questions
  2. Since you have more than a few BOA sales, we recommend entering sales section totals
    1. Continue
  3. Before entering sales section totals, take a moment to find them on your 1099-B
    1. Continue
  4. Now, we'll enter one sales section total on your BOA 1099-B
    1. Use the drop down menu to select the correct designation.

 

Code A. This code indicates a short-term transaction for which the cost or other basis is being reported to the IRS. Use this code to report a transaction that the recipient will report on Schedule D (Form 1040), line 1a, or on Form 8949 with box A checked with totals being carried to Schedule D (Form 1040), line 1b.

 

Code B. This code indicates a short-term transaction for which the cost or other basis is not being reported to the IRS. Use this code to report a transaction that the recipient will report on Form 8949 with box B checked with totals being carried to Schedule D (Form 1040), line 2.

 

Box C. Report on a Part I with box C checked all short-term transactions for which you can't check box A or B because you didn't receive a Form 1099-B (or substitute statement).

 

Code D. This code indicates a long-term transaction for which the cost or other basis is being reported to the IRS. Use this code to report a transaction that the recipient will report on Schedule D (Form 1040), line 8a, or on Form 8949 with box D checked with totals being carried to Schedule D (Form 1040), line 8b.

 

Code E. This code indicates a long-term transaction for which the cost or other basis is not being reported to the IRS. Use this code to report a transaction that the recipient will report on Form 8949 with box E checked, with totals being carried to Schedule D (Form 1040), line 9.

 

Box F.  Report on a Part II with box F checked all long-term transactions for which you can't check box D or E because you didn't receive a Form 1099-B (or substitute statement).

 

Code X. Use this code to report a transaction if you cannot determine whether the recipient should check box B or box E on Form 8949 because the holding period is unknown.

 

Open or continue your return (if it's not already open) and search inside TurboTax for the phrase stock sales.

  1. Select the Jump to link in the search results.
  2. Answer Yes to both Did you sell stocks, mutual funds, bonds, or other investments? and Did or will you receive a 1099-B form or brokerage statement for these sales?
    • If you land on Here are all your 1099-B sales, select Add sales from a different brokerage. Then answer Yes to Did or will you receive a 1099-B form or brokerage statement for these sales?
  3. When asked how you want to enter your 1099-B, select I'll type it in myself.
  4. Select or enter your brokerage on the next screen and continue.
  5. On the following screen (Tell us about...), answer the questions until you reach the next screen. Select the second option, Let's enter a summary instead, and select Continue.
  6. You'll now be able to enter the total proceeds (sales) and cost basis, along with the sales category. Refer to your 1099-B for the amounts and category. When finished, select Continue.

When you are done, you'll eventually come to the Here's a summary of your broker sales screen where you can edit, delete, or enter more sales.

 

You will have to mail a copy of your 1099-B to the IRS.  TurboTax will produce a Form 8453. You print the Form 8453 and attach the brokerage statement(s) to it. 

 

 

IRS requires details to be listed on a Form 8949,
or on your other forms (e.g. consolidated 1099-B) which have the same information and in the same manner as Form 8949.
Either way, if you choose to summarize, you have to mail the transaction details to the IRS within three business days of IRS accepting your e-Filed tax return.(unless you have attached a PDF of the transactions details to your e-Filed return. TurboTax seems to be adding this feature now).
Only Exception: if you summarize Category A or Category D, Form 8949 is not needed for transactions without adjustments. No mailing is necessary.
If you don't have a 1099-B from coin base (crypto) your sales category is C or F.

There is no exception for these categories.

 

 

See this article on how to report cryptocurrency:

 

https://ttlc.intuit.com/community/cryptocurrency/help/how-do-i-report-bitcoin-or-other-cryptocurrenc...

 

 

seccam
Level 1

If you have earned income credit because of earned income in 2019 - but no EIC in 2021 - you can not e-file?

Yes I can refile but can I attach about 100 pages of 8949 to give an explanation of those crypto transactions for which I have not received 1099-B ....

also like I said taxact said we cant efile because we are getting earned income credit but don't have proper earned income in 2021 (using 2019 earned income to get EIC) 

seccam
Level 1

If you have earned income credit because of earned income in 2019 - but no EIC in 2021 - you can not e-file?

Please correct me if am wrong.

 

1. If we have received 1099-B with basis reported to IRS (short term so option A) - there is no need to give further details like date sold / cost basis etc for individual stock correct? I mean we just give total from 1099-B   as summary ?

2. We have to give details on 8949 only if we have not received 1099-B or received but basis not reported

3. Are u sure we can efile with turbotax even though there is no earned income for 2021 but still get eic based on 2019?

4. what do you recommend should I print all those 8949 pages (about 100) or just efile ? 

seccam
Level 1

If you have earned income credit because of earned income in 2019 - but no EIC in 2021 - you can not e-file?

now I am debating - should I go ahead with TurboTax premier which costs about 100$ - in this option I don't have to send anything via mail to IRS  or I can use freetaxusa to efile but have to send 8949 via mail which is about 100 pages big file so 100 printouts  (because they don't support outside file upload) 

What do you suggest ?

is there any way like discount code for turbotax premier?

seccam
Level 1

If you have earned income credit because of earned income in 2019 - but no EIC in 2021 - you can not e-file?

now I am debating - should I go ahead with TurboTax premier which costs about 100$ - in this option I don't have to send anything via mail to IRS  or I can use freetaxusa to efile but have to send 8949 via mail which is about 100 pages big file so 100 printouts  (because they don't support outside file upload) 

What do you suggest ?

 

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