Line 1 of the Sch K-1 from the S-Corp is ordinary income.  My concern is not the EIC, as she obviously has no earned income as a result of choosing this particular tax vehicle ( LLC as an S-Corp ) - it is the CTC b/c the instructions are clear that you do NOT need earned income or income at all in order to receive the fully refundable portion of the CTC ($1,500).   How in the world do we do that?!