NY + EIC + Unemployment

[HV Ken]

Client came by today with a notice from NY, claiming the EIC calculation was wrong. This has to do with the 10,200 unemployment exclusion.

NY IT-215 line 10 is the Federal EIC amount, or RECOMPUTED EIC amount. This amount needs to be REcalculated having the $10,200 added back in to the Federal EIC calculation.

1. There is really not an easy way to do this in ATX, since the value simply flows from the Federal form.
2. I'm surprised the software is not calculating this correctly.

Just a heads-up for anyone else who has a NY return with EIC and unemployment calculation - the software is (currently) not calculating this correctly.

[Lion EA]

Form IT 558 adjustment code A-011

https://content.govdelivery.com/accounts/NYTAX/bulletins/2ca9827

https://www.tax.ny.gov/pdf/current_forms/it/it558i.pdf

https://www.tax.ny.gov/pit/ads/efile_addit558-2d.htm

[HV Ken]

3 minutes ago, Lion EA said:

Form IT 558 adjustment code A-011

https://content.govdelivery.com/accounts/NYTAX/bulletins/2ca9827

https://www.tax.ny.gov/pdf/current_forms/it/it558i.pdf

https://www.tax.ny.gov/pit/ads/efile_addit558-2d.htm

Nope - that is for the NY AGI on the IT-201.

This is specific to the EIC calculation. ATX is passing the Federal EIC as calculated on the lower AGI and needs to do the calculation on the non-reduced (higher) AGI and pass that amount.

[Lion EA]

Sorry, I don't have any NY returns with EIC and read your post too quickly, I guess. Did you report this to ATX?

[HV Ken]

3 minutes ago, Lion EA said:

Sorry, I don't have any NY returns with EIC and read your post too quickly, I guess. Did you report this to ATX?

Not yet - wanted to alert people right away. Going to open a trouble ticket when the work day is done.

[B. Jani]

Thanks Ken for bringing this to attention. I will check my filed returns for possible problem.

[TaxCPANY]

I must disagree, Ken:  I have several New Yorkers receiving both federal EIC and UCE, and for all those clients ATX indeed boosted their New York AGI by the UCE before testing whether IT-215 permits the state credit.
Might you be looking at a IT-203, in which I have no clients meeting the initial test?  Or, in all cases where you see NY EIC being permitted incorrectly, are both Forms IT-201 and -215 the proper versions, and was IT-558 included which -- ATX's oversight -- is not included automatically for everyone?
Else I believe the illusion of a mistake stems from ATX's 'bunny jump' from IT-215 line 10, as that's what your reply to LionEA implies; it does go to Form 1040 line 27, as if federal AGI were accepted uncritically.  But following the green arrow from IT-215 line 9, instead, leads to IT-201's line 19a (and its worksheet illustrating the addback).

[HV Ken]

Thanks for the details TaxCPANY. Perhaps these are returns that were filed and completed before updates were rolled out to the forms. 

I am going to take a closer look based on the additional information you shared.

[Carolbeck]

Where I had the NYS EITC issue is with the Federal Return allowing the taxpayer to use their 2019 Earned Income if that gave them a better EITC they could use

the 2019 Earned Income vs 2020. Well NYS does not allow for that, you have to manually change the the earned income for NYS to be the actual 2020 amount,

not just the 20% of the Federal EITC. Have many not so nice words for NYS Tax Department for this fiasco including dragging their feet with the Federal Non Taxable UE change. Yes it is Taxable, NO its not, wait we are thinking about it. No, passing legal marijuana legislation is so much more important! /s

[HV Ken]

3 hours ago, Carolbeck said:

Where I had the NYS EITC issue is with the Federal Return allowing the taxpayer to use their 2019 Earned Income if that gave them a better EITC they could use the 2019 Earned Income vs 2020. Well NYS does not allow for that...

According to: https://www.tax.ny.gov/pit/credits/eitc.htm

they are honoring using 2019 for the calculation.

[GraceNY]

RE: NYS + EIC (not unemployment).

This addresses Carolbeck's  post.

I had the same thing happen.  NYS changed EIC and I thought I was wrong until I read HVKen's post and reviewed the instructions.  NYS is allowing the use of 2019 income but you had to enter a Special Code on IT-201 Item G.  It's Code P3.

See Form IT-215 Instructions page 2, left hand side, just above "Worksheet A."