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Best answer by Hal_Al

TurboTax is doing it correctly.

The earned income credit is first calculated (actually looked up in a table) on your earned income; then it is calculated on your total income (AGI)*. You get the lesser of the two calculated EIC numbers. See the 2018 EIC table at:

https://taxmap.irs.gov/taxmap/instr/i1040gi-015.htm

*your earned income + your unemployment + any other income


1 reply

Hal_Al
Level 15
Hal_AlLevel 15Answer
Level 15
June 6, 2019

TurboTax is doing it correctly.

The earned income credit is first calculated (actually looked up in a table) on your earned income; then it is calculated on your total income (AGI)*. You get the lesser of the two calculated EIC numbers. See the 2018 EIC table at:

https://taxmap.irs.gov/taxmap/instr/i1040gi-015.htm

*your earned income + your unemployment + any other income


Level 2
June 6, 2019
Obviously the amounts come from the EITC table,  however that is not the question.. Let me clarify.  Unemployment is considered taxable by the federal government,  but unemployment is not supposed to be added to income to affect eligibilty for EITC. So why does it does not remove unemployment income when calculating EITC eligibility income?