I have a client that gets a W-2 for disability income. There is no social security, Medicare, etc. taken out. ProSeries thinks he qualifies for the credit. I'm not sure. Any thoughts?
This is what the IRS website says (http://www.irs.gov/individuals...) specifically referring to the EITC. Seems to me that since there is nothing specific to say anything different for Making Work Pay Credit, the same definitions apply:
"The IRS considers disability retirement benefits as earned income until you reach minimum retirement age. Minimum retirement age is the earliest age you could have received a pension or annuity if you did not have the disability.
After you reach minimum retirement age, IRS considers the payments as a pension and not earned income. "
This website (http://www.irs.gov/pub/irs-utl...) specifically says the following types of disability benefits are NOT counted as earned income:
• Social Security Disability Insurance
• Supplemental Security Income
• Military disability pensions
• Payments from individually-purchased disability insurance policies
So, if the W-2 is for long-term employer-paid disability benefits, to me, it looks like they qualify him for the Making Work Pay credit.
