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VA BENEFITS AND EARNED INCOME CREDIT

TAXDAY
Level 1

Would a spouse's VA disability benefits affect EIC on return?  

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RollTide68
Level 8

MAGI for EIC includes tax exempt interest and foreign income per the instructions.  I don't think it includes any other income.

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RollTide68
Level 8

VA Disability Benefits
Disability benefits received from the VA should not be included in your gross income. Some of the payments which are considered disability benefits include:

  • Disability compensation and pension payments for disabilities paid either to Veterans or their families,
  • Grants for homes designed for wheelchair living,
  • Grants for motor vehicles for Veterans who lost their sight or the use of their limbs, or
  • Benefits under a dependent-care assistance program.

Short answer NO.

TAXDAY
Level 1

Thanks for your response and ROLL TIDE!

I realize it is not income and would not be taxable, but would it factor into the EIC calculation?  It's almost $39k a year.  In Michigan, this could preclude one from getting a property tax credit which is driving this thought process.  

 

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RollTide68
Level 8

MAGI for EIC includes tax exempt interest and foreign income per the instructions.  I don't think it includes any other income.