Clergy and EIC

[Dave T]

I must be doing something wrong.

New client comes yesterday.  He and wife both clergy. He opted out of SS years ago, she did not.

Their AGI was $39,049 and they have one child under 19.  Before calculating S/E tax on wife's income I prepare EIC and find they are eligible for EIC of $1,116.  I then prepare the S/E for the wife based on her $27K w-2 wages and EIC goes away.  Looking at Work Sheet B of the EIC questions it looks like AGI and S/E amount are added together to put them over the $46K threshold.

Am I doing something incorrectly or is this supposed to be the correct calculation and they are not eligible for EIC.

 

Thanks very much

Dave T

 

[Terry D EA]

Did  the 39,049 include the business income that generated the SE tax? SE tax has no bearing on determining eligibility for EIC.

[Dave T]

Yes the wife's $27K was input via W-2 but no social security withheld and thus the need to do schedule S/E

When answering the EIC questions it asks in section 5 did you have S/E earnings due to be a clergy which is yes and thus on Worksheet B it added the $27K from W-2 wages as well as the $27K from schedule S/E which put them over the threshold for EIC eligibility.

Thanks for your help with this.  It definitely seems they should be entitled.

 

 

[Lion EA]

How much was her housing allowance.

And, if he is religiously opposed to accepting government help from the SSA, then why is he not religiously opposed to accepting government help in the way of EIC? Just asking.

[Dave T]

Housing allowance was taken against his wages not hers.  Also she didn't opt of Social Security. He did years ago and she only became clergy more recently and chose not to opt out.

As to your latter question, I can't answer that nor is it my position to ask.

 

[Jack from Ohio]

On 3/8/2019 at 9:56 AM, Dave T said:

I must be doing something wrong.

New client comes yesterday.  He and wife both clergy. He opted out of SS years ago, she did not.

Their AGI was $39,049 and they have one child under 19.  Before calculating S/E tax on wife's income I prepare EIC and find they are eligible for EIC of $1,116.  I then prepare the S/E for the wife based on her $27K w-2 wages and EIC goes away.  Looking at Work Sheet B of the EIC questions it looks like AGI and S/E amount are added together to put them over the $46K threshold.

Am I doing something incorrectly or is this supposed to be the correct calculation and they are not eligible for EIC.

 

Thanks very much

Dave T

 

Send me a PM.  I can help you through this issue. 

[Dave T]

Jack

Would be glad to do so but I must confess my naivete. How do I  send a PM?

Thanks for your willingness to help with this

Dave T

 

[jklcpa]

2 hours ago, Dave T said:

Jack

Would be glad to do so but I must confess my naivete. How do I  send a PM?

Thanks for your willingness to help with this

Dave T

 

Two ways:

Click on Jack from Ohio's name that will take you to his profile page and click on message - 

 

Or, from any page, click on the envelope in the upper right of the screen and fill in "Jack from Ohio" as the recipient.  This envelope is also where you'll see the indicator when you receive messages back to you. - 

[Dave T]

Thanks very much !