For purposes of calculating the Earned Income Credit (EIC), unemployment is not included in earned income but is included in Adjusted Gross Income (AGI). If your AGI results in a lower EIC, you must use that amount. The TaxAct® program will automatically do this calculation for you on the Form 1040 Earned Income Credit Worksheet.
For additional information, please refer to IRS Publication 596
or Worksheet A on page 56 of the IRS Instructions for Form 1040