I'm in agreement with Bill.  If there is a net loss in earnings from self-employment (which losses from 1120-S are not), that would be netted against compensation from the W-2, which is in line with the definition of Earned Income under §32 to which §24 refers.  In that case, ProSeries would be correct in not computing any refundable CTC on F.8812 assuming the sum of the W-2 wages and net earnings from self-employment is less than $0.

Over $200,000 in losses from K-1s is a hefty sum.  Have you already considered basis and at-risk limitations?  The system may allow the losses if you mark those as being non-passive but there should be a diagnostic that prompts you to review those limitations.