EITC check-list - Who May Claim the EITC?
Earned Income Credit (Refundable)
To claim the EITC, taxpayers must meet all of the following rules:
○ Investment income must be $3,200 (2012) or less for the year.
○ If married, the taxpayers cannot file separately; they must file a joint return (MfJ).
○ Taxpayer(s) and all qualifying children must have a valid Social Security number.
○ Taxpayer must be a US citizen or a nonresident alien married to a US citizen or resident alien and filing a joint return.
○ Taxpayer cannot file Form 2555 related to foreign-earned income.
○ Taxpayer cannot be the qualifying child of another person.
○ Taxpayer must have earned income; however, earned income and AGI cannot be more than an amount specified:
Preview of 2012 Tax Year
To claim the EITC, taxpayers must meet all of the following rules:
○ Investment income must be $3,200 (2012) or less for the year.
○ If married, the taxpayers cannot file separately; they must file a joint return (MfJ).
○ Taxpayer(s) and all qualifying children must have a valid Social Security number.
○ Taxpayer must be a US citizen or a nonresident alien married to a US citizen or resident alien and filing a joint return.
○ Taxpayer cannot file Form 2555 related to foreign-earned income.
○ Taxpayer cannot be the qualifying child of another person.
○ Taxpayer must have earned income; however, earned income and AGI cannot be more than an amount specified:
Preview of 2012 Tax Year
Taxpayers with no qualifying children must meet the following criteria:
○ Be age 25 but younger than 65 at the end of the year
○ Live in the United States for more than half of the year
○ Not qualify as a dependent of another person
○ Live in the United States for more than half of the year
○ Not qualify as a dependent of another person
Taxpayers with a qualifying child must meet the relationship, age, and residency tests:
○ Relationship Test – To be a qualifying child, a child must fall into one of the following categories:
• Son, daughter, stepchild, foster child, adopted child, or a descendant of any of them (for example, a grandchild)
• Brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them (for example, a niece or nephew)
○ Age Test – A qualifying child must be as follows:
• Younger than the taxpayer or taxpayer’s spouse if filing a joint return, and
• Under age 19 at the end of the year, or
• A full-time (five months or more) student under age 24 at the end of the year
• Permanently and totally disabled at any time during the year, regardless of age
○ Residency Test – Child must have lived with taxpayer in the US for more than half of the tax year. Important: Sometimes a child meets the rules to be a qualifying child of more than one person.
However, only one person can treat that child as a Qualifying Child and claim the EITC using that child. Taxpayers can choose which person will claim the EITC. If the taxpayers do not reach an agreement and more than one person claims the EITC using the same child, the tiebreaker rule applies, and the parent with whom the child lived the longest during the year receives the credit. If the child lived with each parent the same amount of time, the parent with the higher AGI receives the credit.
In summary, there are two categories that qualify for the EITC:
• Qualifying Child and
• Qualifying Relative.
A third category, a Person who qualifies as a dependent but is not related to the Taxpayer, has to live with the taxpayer the full year and does not qualify the Taxpayer for HofH status or credits. A QC or QR only has to live with the Taxpayer for more than half the year, and qualifies the taxpayer for HofH status and at least some credit.
○ Relationship Test – To be a qualifying child, a child must fall into one of the following categories:
• Son, daughter, stepchild, foster child, adopted child, or a descendant of any of them (for example, a grandchild)
• Brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them (for example, a niece or nephew)
○ Age Test – A qualifying child must be as follows:
• Younger than the taxpayer or taxpayer’s spouse if filing a joint return, and
• Under age 19 at the end of the year, or
• A full-time (five months or more) student under age 24 at the end of the year
• Permanently and totally disabled at any time during the year, regardless of age
○ Residency Test – Child must have lived with taxpayer in the US for more than half of the tax year. Important: Sometimes a child meets the rules to be a qualifying child of more than one person.
However, only one person can treat that child as a Qualifying Child and claim the EITC using that child. Taxpayers can choose which person will claim the EITC. If the taxpayers do not reach an agreement and more than one person claims the EITC using the same child, the tiebreaker rule applies, and the parent with whom the child lived the longest during the year receives the credit. If the child lived with each parent the same amount of time, the parent with the higher AGI receives the credit.
In summary, there are two categories that qualify for the EITC:
• Qualifying Child and
• Qualifying Relative.
A third category, a Person who qualifies as a dependent but is not related to the Taxpayer, has to live with the taxpayer the full year and does not qualify the Taxpayer for HofH status or credits. A QC or QR only has to live with the Taxpayer for more than half the year, and qualifies the taxpayer for HofH status and at least some credit.
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