If you don't qualify for the Earned Income Credit (EIC) and don't want the software to include a dependent in the EIC calculation, you can remove that dependent from EIC consideration.
To do this in the program:
- Go to Basic Information from the left navigation menu.
- Select Dependents/Qualifying Children.
- Click Edit next to the dependent you don't want included in the EIC calculation.
- Check the box labeled "I do not want to claim this person for Earned Income Tax Credit (EITC) purposes."
- Click Continue to save your changes.
Once updated, the software will no longer use that dependent when determining your EIC eligibility.
How Do I Know If I'm Eligible for the EIC This Year?
The Earned Income Credit has several eligibility requirements, including income limits, filing status, residency, and Social Security number requirements.
If you're unsure whether you qualify, our software will automatically review your information and calculate the credit if you're eligible. You can also use the IRS EITC Assistant to help determine whether you qualify.
What If My EIC Was Previously Disallowed?
In most cases, the IRS will notify you if your Earned Income Credit was reduced or disallowed. Signs that this may have happened include:
- Receiving an IRS notice explaining the adjustment.
- Receiving a refund that was less than the amount shown on your tax return.
- Being required to complete additional forms before claiming the credit again.
If you're unsure whether the IRS previously disallowed your EIC, contact the IRS directly at 800-829-1040.
What If I'm Prohibited From Claiming the EIC?
The IRS may temporarily prohibit taxpayers from claiming the EIC if a prior claim was improper.
- If the IRS determined the error was due to reckless or intentional disregard of the EIC rules, you may be barred from claiming the credit for 2 years.
- If the IRS determined the claim involved fraud, you may be barred from claiming the credit for 10 years.
The length of the prohibition depends on the year the IRS denied the credit and the reason for the disallowance.
If you're prohibited from claiming the EIC, follow this path in the software:
- Federal
- Deductions- Select My Forms
- Credits
- Claiming Refundable Credits After Disallowance
- Not Eligible for EIC
Additional Information
If your EIC was previously reduced or disallowed and you're now eligible to claim it again, you may need to complete Form 8862, Information to Claim Certain Credits After Disallowance before the IRS will allow the credit.
You can review the following sources for further references about Form 8862 and EIC: