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Earned Income Is Too High: The IRS sets a specific range of earned income for each filing status each year, which determines eligibility for the credit. You can test this by adjusting the AGI on the return and checking the current income limit from the IRS website.
Disqualifying Income: Some sources of income, like foreign income and certain benefits, may disqualify the taxpayer from claiming the credit. Test this by adjusting the source of income on the return.
Non-Qualifying Dependent: Not all dependents qualify for the EIC. Factors that might disqualify a dependent include relationship, residency, citizenship, support, and income levels.
Tax Liability: The EIC might not be applied as a refundable credit added to the total refund amount if there is existing tax liability that was already reduced by the credit amount.
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The content provided under this page is for informational purposes only and should not be considered legal, accounting, or tax advice. |