ILLMAS Posted May 3, 2021 Report Share Posted May 3, 2021 Not my client but my associates, his client received a letter from the IRS informing them that the state of IL paid them around $9,000 in interest for back child support, his client didn’t even know about it, just thought it was part of the child support. Now for the bad part, taxpayer income is very low and due to the interest they lost around $6,000 of EIC and need to repay it back. This is an unusual case, interest income is interest income but it’s not like the taxpayer was saving the money from their earnings, would other income work? Thanks 1 Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted May 3, 2021 Report Share Posted May 3, 2021 I think they're screwed, at the technical level, but it might be worth an appeal. 1 Quote Link to comment Share on other sites More sharing options...
Pacun Posted May 4, 2021 Report Share Posted May 4, 2021 Interest or other income will cause the loss of some EIC. So it will not make any difference if reclassified. I can only imagine how much that person received in child support that year in order to earn 9K in interest. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.