Earned Income Not Qualifying for EIC
One income item that is reported on Form W-2, but does not qualify as earned income for EIC purposes, is income received for work while an inmate in a penal institution. This includes work performed while in a work release program or while in a halfway house.
To review information related to the software, go to the Volunteer Resource Guide for more information about completing Schedule EIC — Worksheet. If you indicate on the EIC worksheet that the income was earned while an inmate in a penal institution, PRI and the amount will be printed next to Form 1040, line 7.