A client's 1040 is going to reflect wages and dependent that would otherwise qualify for EIC but is the S Corp Loss that will create an NOL going to block EIC? Child was 19 at the end of 2011 so no Child or Dependent Care credits.
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That depends...
The S corp loss will not, in and of itself, disqualify the taxpayer from EIC.
EIC gets knocked out by excessive investment income; losses have no direct impact.
Where you'll see an impact is in the AGI.
EIC uses a complicated formula where sometimes the amount of EIC is based on earned income, and sometimes it is based on something called modified AGI. It's in the worksheets. I can't do it in my head.
BMKBurton M. Koss
koss@usakoss.net
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The map is not the territory...
and the instruction book is not the process. -
Yeah, pretty sure you'll lose EIC. Think the way it calculates is you calculate based on earned income then again based on AGI and take the smaller value.Comment
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