EIC credit

Each and every time a taxpayer receives a letter from IRS, he must carefully consider whether a response is required or some other action is required.

You paid H&R Block to prepare your tax return in such a way that you don't hear from IRS. Have them deal with it. It's entirely possible that IRS is correct and there was a problem with Schedule 3.

I'm a little confused. When you filed, did your return show that you were eligible for the refundable credit or not?

EIC is one of those credits that IRS tends to scrutinize because there is so much low-hanging fruit to deny eligibility, and the taxpayer can be penalized in such a way that they cannot claim the credit in several future tax years.

Unfortunately, you really should have H&R Block either fix your Schedule

What line of your Form 1040-SR is the $15 credit on? If it's EIC it should be on line 27, and it does not require Schedule 3. If it's on 1040-SR line 20 or line 31 it's something else, and it should be on Schedule 3.

When you say "H&R Block calculated for me" do you mean that you used H$R Block software to prepare your tax return yourself, or do you mean that you went to an H&R Block office and an H&R Block employee prepared your return for you? If an H&R Block employee prepared the return, then I agree with Adam Kerman that H&R Block should deal with the IRS letter on your behalf.

Bob Sandler

I used H&R software to do my return. I went back in and specifically checked the EIC section. There was a box that I missed and was surprised when I was granted any EIC, but figured 'what the heck.'

My error, I guess, so I'm letting it slide.

See my last reply. it was on ln. 27 and Sch. 3 was nothing but zeroes. I used the H&R software and somehow just missed checking a box. The software missed it on the final check too.

No taxes owed, just not getting the $25.00.

Can you be very specific about this tic box so I can figure this out?

It's not just not being entitled to claim the credit for 2023. It's being put on the "deny EIC and give tax returns extra scrutiny" list for several years.

Don't let this slide.

I cannot figure out what the Schedule 3 issue is. The only stuff vaguely related would be Line 2 (nonrefundable) Credit for Child and dependent Care, but you don't list the number of children here, or 13z, refundable credits not reported elsewhere, but you don't claim EIC on this line.

Doesn't their software have human backup? Ask them for assistance.

Went back into my return. Saved it to another name so that I could retain the original.

On the 1040 SR, the $25.00 appears on ln. 27 and then ln. 32, 34 & 35a. It appears no where else on the submitted return and the only forms filed with the 1040SR were Sch. B, C & D and form 8949.

Going back to review the data entered, I started with the Federal mod, then Credits and then EIC.

First page - Check any that apply - only checked 'I have a Soc. Sec. number'

Second page - Tell us where your main home was - 'Yes it was in the US over

Third page - Are you a Dependent of another - THIS FIELD WAS BLANK on the originally filed return, so neither field was checked and the software missed it.

Soon as I checked 'NO,' the EIC credit disappeared.

Hope that helps. Ultimately, my error, but H&R Block didn't catch it.

No, that you made this error was not your error. It's flawed software design.

You saw the question, realized it didn't apply to you (I'll assume it's been decades since you were last a dependent), and ignored it. Anyone unfamiliar with H&R Block software would have done the same. If the taxpayer filled out the form manually, the default assumption is that the taxpayer IS NOT a dependent unless he states that he is. The software changed that assumption so that the taxpayer IS a dependent unless he states otherwise.

H&R Block should have provided a worksheet to assist with the calculation of whether the taxpayer can be claimed as a dependent, not leaving it to the taxpayer to know about this and finding the worksheet in the 1040 instructions. Note that the taxpayer who can be claimed as a dependent must tic "yes" regardless of whether the other taxpayer does indeed make such a claim.

Being a dependent changes your standard deduction. The worksheet in the instructions is on page 34. There's also a very lengthy worksheet to calculate the EIC which some people with low income without dependents themselves are eligible for.

Typically if you've got adequate income from pensions and retirement funds, you won't be eligible for EIC. I don't understand why being a dependent would have changed the calculation enough that you became eligible.

I have advice for you on next steps.

H&R Block really should bend over backwards to help you. This couldn't have possibly affected you alone.

Thanks, Adam. That makes sense, the default should be that 'I'm not a dependent' and 'probably not eligible for EIC' in any situation having no dependents at 73.

I'll write something to H&R. The letter from the IRS expressly doesn't want me to file an amended return and only want my Sch. 3. I'm not worried about audits, since I pay no Fed. taxes nor plan to unless a windfall comes my way.

I misunderstood that bit. IRS hasn't changed the amount on Line 27. They are trying to get you to justify it which is why they asked for Schedule

1. The issue isn't audits but scrutiny of future returns due to the EIC issue, which you don't want.

I think it would save you future headaches if you file the amended return, which is why I gave you that advice. It's not that you don't owe tax but your legal obligation to file accurately.