Client only had UI for 2021, $0 earned income. Using 2019 earned income for EIC as it is more than $0. Software says return doesn't qualify for e-filing as there is no earned income. If I put in $1 for household employee income it qualifies. I have seen in other tax forums that their software allowed e-filing with just UI income and using 2019 earned income. Anyone else run onto this, or is it required to have some 2021 earned income in order to do this?
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Did you try $1 as interest income? You don't want them looking for a household employee. Are you sure you need earned income? What software do you use? -
Yes, tried $1 for interest, no go. I use TaxAct Pro. Some have said it's a software issue.Originally posted by Lion View PostComment
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You have to have EARNED INCOME to qualify for EARNED INCOMETAX CREDIT. Apparently, unemployment in not earned income.This post is for discussion purposes only and should be verified with other sources before actual use.
Many times I post additional info on the post, Click on "message board" for updated content.Comment
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Contact TaxAct Pro.Comment
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Originally posted by Lion View Post
Why not? I would just add $1 of income as a Household Employee or as Foreign Wages.
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If you have a household employee, you report the payroll taxes on Schedule H. The IRS will think you paid her less than minimum wage, perhaps not reporting room & board, or other misinterpretation. If you have foreign wages, you might get a letter asking for your FBAR or FATCA reporting or wanting your travel history to justify that you excluded all your foreign wages except $1. I don't like to put anything where the IRS is likely to send a letter. I don't want to do that to my clients. Most banks don't report interest under $10, so $1 interest income is a safe way to facilitate e-filing. If TaxAct Pro requires earned income, ask them if they have a workaround.Comment
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The IRS won't care about the $1 (and they certainly don't care about minimum wage). And if wages are less then $1000 there would not be a Schedule H and they aren't going to send notices for FBAR and FATCA merely based on $1 of foreign income on the tax return (I don't think that even shows on the tax return as "foreign" wages anyways).Comment
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