EIC affected by SS received?

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Subject Author Date EIC affected by SS received? SMF 03-10-2008  Re: EIC affected by SS received? Elle 03-10-2008  Re: EIC affected by SS received? Mark Bole 03-11-2008  Re: EIC affected by SS received? Elle 03-11-2008
Posted by SMF on March 10, 2008, 8:16 pm Please log in for more thread options Is your eligibility for EIC affected by SS received? Taxpayer has 8000 in wages and 16000 in SS (nothing else). Qualifies for EIC without children. It doesn't appear the receipt of SS affects the EIC. Correct? Thanks! -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Elle on March 10, 2008, 9:23 pm Please log in for more thread options > It doesn't appear the receipt of SS affects the > EIC. Correct? Correct, SS does not count as income that is "earned," so it does not affect the EIC. See page 46 of the Form 1040 Instructions. Generally only the amounts on Form 1040, lines 7 and 12 count towards computation of the EIC. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Mark Bole on March 11, 2008, 10:37 pm Please log in for more thread options Elle wrote: >> It doesn't appear the receipt of SS affects the >> EIC. Correct? > > Correct, SS does not count as income that is "earned," so it > does not affect the EIC. See page 46 of the Form 1040 > Instructions. Generally only the amounts on Form 1040, lines > 7 and 12 count towards computation of the EIC. But first visit page 44 (two pages back), where Step 1 indicates that line 38 (AGI) determines overall eligibility. The more taxable SS included in AGI, the more it can affect the EIC. Also consider Pub 596, but I am particularly partial to Pub 17 Chapter 36. -Mark Bole -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Elle on March 11, 2008, 11:52 pm Please log in for more thread options > Elle wrote: >>> It doesn't appear the receipt of SS affects the >>> EIC. Correct? >> >> Correct, SS does not count as income that is "earned," so >> it does not affect the EIC. See page 46 of the Form 1040 >> Instructions. Generally only the amounts on Form 1040, >> lines 7 and 12 count towards computation of the EIC. > > But first visit page 44 (two pages back), where Step 1 > indicates that line 38 (AGI) determines overall > eligibility. You are right (and certainly correct to point out) that, to be eligible, one has to get by the AGI test and other tests. On the third hand, SS income is not always taxable and so is not always going to count towards AGI. In the OP's case, SS income indeed is not taxable (per page 25 of the Form 1040 instructions), and so the OP's client passes the AGI test (< $12,590 for MFS blah blah). It sounds like the OP is using tax software, and so this would explain why the client's SS income does not affect the client's EIC eligibility. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Similar Threads Posted Can widow's social security benefits be affected if she receives a survivor's annuity??? August 12, 2008, 12:04 am Money received in a lawsuit December 25, 2006, 10:08 pm Tax treatment of money not received.... 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