Disqualifying income for the Earned Income Credit (EIC)

In general, disqualifying income is investment income such as taxable and tax-exempt interest, dividends, child's interest and dividend income reported on the return, child's tax-exempt interest reported on Form 8814, line 1b, net rental and royalty income, net capital gain income, other portfolio income, and net passive income.
Gain that's treated as long-term capital gain under section 1231 (a)(1) of IRC isn't disqualifying investment income. Section 1245, 1250, 1252, 1254 and 1255 gain is considered ordinary gain and therefore isn't included in the calculation of income for purposes of the EIC.
The disqualifying investment income limit for 2022 is $3,400. The application automatically calculates this amount based on information entered elsewhere in the return and prints a supporting worksheet. You can force this amount in the
Disqualifying investment income (Force)
field in the
EIC
screen.

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