Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
New Member
posted Jan 28, 2021 4:07:45 PM

Turbotax is including Alimony in my income which puts me over the limit to qualify for EIC. IRS says Alimony should not be included as part of income. How do I remove?

0 2 425
1 Best answer
Expert Alumni
Jan 28, 2021 4:36:26 PM

If your divorce or separation agreement was executed before December 31, 2018, you must report your alimony as income.  If your divorce or separation agreement was executed after December 31, 2018, you do not have to report it as income.  

 

If you are required to report alimony income, it is considered as unearned, which means it does not count as earned income for the Earned Income Tax Credit (EITC).  However, it does count as income that will be included in your Adjusted Gross Income, which could put you over the limit for the EITC.  

 

If you believe you entered your alimony in error, use these instructions to remove the payment:

  1. Open or continue your return in TurboTax.
  2. In the left menu, select Tax Tools and then Tools.
  3. In the pop-up window Tool Center, choose Delete a form.
  4. Select Delete next to the form/schedule/worksheet in the list and follow the instructions.

2 Replies
Expert Alumni
Jan 28, 2021 4:36:26 PM

If your divorce or separation agreement was executed before December 31, 2018, you must report your alimony as income.  If your divorce or separation agreement was executed after December 31, 2018, you do not have to report it as income.  

 

If you are required to report alimony income, it is considered as unearned, which means it does not count as earned income for the Earned Income Tax Credit (EITC).  However, it does count as income that will be included in your Adjusted Gross Income, which could put you over the limit for the EITC.  

 

If you believe you entered your alimony in error, use these instructions to remove the payment:

  1. Open or continue your return in TurboTax.
  2. In the left menu, select Tax Tools and then Tools.
  3. In the pop-up window Tool Center, choose Delete a form.
  4. Select Delete next to the form/schedule/worksheet in the list and follow the instructions.

Level 15
Jan 28, 2021 4:39:12 PM

The Earned Income Credit was designed to help lower and middle income working families.  To claim the EIC, you must have what qualifies as earned income and also meet certain adjusted gross income (AGI) limits.  (Otherwise, someone with very low earned income (such as from wages), but very high other types of income, could qualify for EIC, which is not what Congress intended).

 

Alimony, while not counted as earned income, is counted towards AGI.