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14506: OK - EIC Non-Refundable Credit


I am working on an OK 511 and the EIC is larger than the tax liability. Why is the Oklahoma EIC not being refunded on this return? 

In prior years, the Oklahoma EIC was figured in Part III of form 511 and was a refundable credit.

Beginning in 2016, the Oklahoma Earned Income Credit is calculated in part II and is no longer a refundable credit. If an amount is allowed on line 16, OK Earned Income Credit, it can be used to decrease a taxpayer's tax liability for line 19, Income Tax of form 511 to no less than zero. It is not, however, able to be refunded even if the amounts on lines 15-18 (non-refundable credits) exceed the Income Tax calculated for the return. 

Per the OK-511 instructions

"Complete line 16 unless your Oklahoma AGI (Form 511, line 7) is less than your Federal AGI (Form 511, line 1). If your Oklahoma AGI is less than your Federal AGI, complete Schedule 511-G to determine the amount to enter on line 16. You are allowed a credit equal to 5% of the earned income credit allowed on your federal return. Provide a copy of your federal return."

The amount on line 16 is only used in the calculation of Income Tax on line 19 of form 511. To review the amount figured for line 16, OK EIC, review the federal EIC amount or OK Form 511-G. 

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