Partnership Income/Earned Income Credit

Forum|Forum|1 year ago
July 24, 2024
2 replies
17 views

I entered K-1 income from an LLC for a client who normally qualifies for the earned income credit. The amount entered exceeded the $11000 threshold for investment income, but was not listed on the EIC worksheet and therefore allowed the credit. IRS disallowed the credit and requested an amended return, but can't get the program to handle correctly.

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Just-Lisa-Now-

Intuit Community Champion

If IRS disallowed the credit and the outcome is now correct, what's there to amend?

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R

rpittmanAuthor

Level 3

I thought the same thing but when client talked to them by phone, that's what they wanted. I advised the client to pay the additional tax billed on the notice, without submitting an amended return, until I could figure out how to get the program to handle correctly, if in fact an amended return was needed. Regardless of the outcome, am I missing something on how to enter the information, so the K-1 income is shown on the investment income worksheet and ultimately exceeds the $11,000 threshold?

Accountant-Man

Level 13

What kind of income is it, and what is the owner's role in the business?

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T

TaxGuyBill

Level 15

What kind of K-1 is it?

Which box of the K-1 is the "investment" income in?

If it is Box 1 of a 1065-K-1, does Box 14 have an amount in it?

R

rpittmanAuthor

Level 3

It's a K-1 from a partnership (Form 1065) in which the taxpayer is a 50% owner. The investment income is "Ordinary Business Income" from box 1. Box 14 contains the same amount coded with "A" (Net earnings from self-employment) and Code "C" (Gross non-farm income) which obviously is a higher amount.

sjrcpa

Level 15

That's not investment income. That's Earned Income.

The more I know the more I don’t know.

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