I have a client with all kinds of issues on his return that is creating a mess on all of the worksheets and schedules. The first issue is:  ProConnect is recognizing cancellation of debt income as child investment income from Schedule 1 line 8.  Because of this, my client does not qualify for the EIC credit because the cancellation of debt income exceeds the investment income limit.

The other issue is with Schedule SE: My client has Schedule C business income but also has losses (in excess of basis from a parnership K-1).  I have accounted for this correctly in the software but the program is NOT calculating SE tax on the Schedule C profit (it's being wiped out by the non-deductible losses).  This is wrong and I'm not sure why this is happening this year.

This client had the same income situation (in regards to the Schedule C and non-deductible losses) in 2019 and the program calculated everything correctly.

If anyone has some insight or advise on how to handle this, I sure would appreciate it.