Alternates to using IRA SEP funds

From Texas, I think I know the IRS code pretty well and do my own taxes. Question: I have a consulting business (s corp) that has struggled the last 3 years. My W2 income is zero and I make about $10K annually from misc. investments. I consider my biz viable, but have exhausted my reg. savings in order to live and support the biz, and now am tapping SEP-IRA funds, and paying the 10% penalty. Being a consultant with no recent wage history, I can't even get state unemp. help, or help of any kind for that matter. Do I have any options? Is there any credit for the 10% penalty in filing my 1040 (doesn't seem to be)?

From the facts you give, none of the exceptions to the early withdrawal penalty apply. However, you probably do qualify for the earned income credit.

Thanks very much. I did look at EIC. The question is whether money I pull out prematurely from my SEP-IRA counts as income against the EIC threshold.

Appreciate your assistance and answer.

Such amount is considered part of your modified adjusted gross income for purposes of the credit, but it is not considered earned income.

Thanks again for your reply. Looks like I am SOL.