A client just received a letter from IRS giving them the Make Work Pay credit when my interpretation is that they do not qualify.
Assume client otherwise qualifies for MWP and has the following--
W-2--- 40,000 Pension income-- 50,000 Schedule F loss of 45,000
My reading of Schedule M instructions including the worksheet says the Schedule F loss offsets the W-2 income and thus no 800 MWP credit (MFJ). Pension income should have no effect.
It appears IRS is not offsetting the W-2 with the Sch F loss and giving the
800 MWP credit to them.
Anyone else seen this or have any comments?