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This is excluded because of two issues.

 

First, when the self-employment tax is zeroed out, the IRS will reject the e-file with Fed Reject Code 0195.

0195 Schedule SE - When Self-Employment Tax is significant, Deduction for 1/2 of Self Employment Tax must be significant, and vice versa. If Self-Employed Deduction Schedule SE of Form 1040 is significant, it must equal Deduction for 1/2 of Self Employment Tax from Schedule(s) SE. If Deduction for 1/2 of Self Employment Tax of Schedule SE is significant, and Exempt-Notary Literal is not significant, then Self-Employed Deduction Schedule SE of Form 1040 must be significant.

Second, the IRS adjusts refunds or sends tax bills to customers who have reduced self-employment tax.The IRS DOES NOT GET AND HAS NOTHING IN PLACE TO GET the data input in the return with the efile. They can't tell why the customer has reduced self-employment income and tax so the math is wrong from their perspective.

 

This was verified with the IRS prior to implementation.