Eic

[gman]

I have had several clients -single parent living with boyfriend or grandparents. From the taxbook, it appears that parent living with boyfriend could claim child for EIC as long as the parent and child lived together. NO matter who provided support. So I would file her single claiming EIC. That would be correct, right?

For EIC, basically must just live together for the year(parent & child)

[Gretel]

Yes, I agree.

[Possi]

"single" and not "HOH" for EIC?

I have had several clients -single parent living with boyfriend or grandparents. From the taxbook, it appears that parent living with boyfriend could claim child for EIC as long as the parent and child lived together. NO matter who provided support. So I would file her single claiming EIC. That would be correct, right?

For EIC, basically must just live together for the year(parent & child)

Did I understand that right? She would file as "single" claiming one child, and not HOH because she didn't provide over half the support, living with someone making more money than she did?

~possi

[Koss]

Single vs. HoH

A few observations:

(1) There is no support test for EIC. The requirements are age, residency and relationship.

(2) There are three different support tests:

(a) Support for purposes of Head of Household requires that the taxpayer pay more than half the cost of keeping up the home. Although the home must be the main home of a qualifying person, the test does not explicitly require that the taxpayer provide support to that person. Keeping up a home is not the same as supporting another person.

(b) Support for a qualifying child requires that the child must not have provided more than half of his own support. This test also does not require that the taxpayer provide support to the child.

(c) Support for a qualifying relative does indeed require that the taxpayer provide more than half of the person's support.

(3) For some taxpayers, the question of whether they qualify for HoH status is irrelevant. Many single mothers who are living with their boyfriend have AGI in the range of around $11,000 or so. The standard deduction for single plus two personal exemptions will reduce the taxable income to zero. The increased standard deduction for HoH has no impact.

With that being said, if the single mother's AGI is $11,000, and her boyfriend's AGI is $28,000, it is very unlikely that she provided more than half the cost of keeping up the home.

Nevertheless, she can claim her qualifying child as a dependent, and for EIC and the Child Tax Credit, even if she provided no support at all for the child--as long as the child didn't provide more than half of his own support.

This example isn't meant to be judgmental or sexist. It reflects the economic reality of many taxpayers today.

With that being said, I have worked with a few female clients who were actually the breadwinners, claiming their boyfriends as dependents under the rules for qualifying relative, because they supported them and lived with them all year, and these guys just aren't working. Sometimes the guy is disabled, sometimes he's a freeloader, and sometimes he's just out of work...

BMK

[Possi]

A few observations:

(1) There is no support test for EIC. The requirements are age, residency and relationship.


(3) For some taxpayers, the question of whether they qualify for HoH status is irrelevant. Many single mothers who are living with their boyfriend have AGI in the range of around $11,000 or so. The standard deduction for single plus two personal exemptions will reduce the taxable income to zero. The increased standard deduction for HoH has no impact.

With that being said, if the single mother's AGI is $11,000, and her boyfriend's AGI is $28,000, it is very unlikely that she provided more than half the cost of keeping up the home.

Nevertheless, she can claim her qualifying child as a dependent, and for EIC and the Child Tax Credit, even if she provided no support at all for the child--as long as the child didn't provide more than half of his own support.

This example isn't meant to be judgmental or sexist. It reflects the economic reality of many taxpayers today.

With that being said, I have worked with a few female clients who were actually the breadwinners, claiming their boyfriends as dependents under the rules for qualifying relative, because they supported them and lived with them all year, and these guys just aren't working. Sometimes the guy is disabled, sometimes he's a freeloader, and sometimes he's just out of work...

BMK

Thanks again for the enlightenment. I'm always learning......

[MAJ]

Eic

Koss ...
Very well put. opened a few eyes / thoughts... I appreciate it.

Question: You said she claimed her boyfriend as a qualifying relative. How is that a qualifying relative? I can see status of OTHER... but...

Again, I appreciate the knowledge transfer...

[Jesse]

Koss ...
Very well put. opened a few eyes / thoughts... I appreciate it.

Question: You said she claimed her boyfriend as a qualifying relative. How is that a qualifying relative? I can see status of OTHER... but...

Again, I appreciate the knowledge transfer...

Not Koss, but....

You are correct but it would be "other" as equals qualifying relative (not a qualifying child).

Those are the only two choices 1. Qulaifying child or 2. Qualifying relative.

[Possi]

boyfriend?

She can't claim the b/f if their relationship violates local law....

One question...

Who's gonna check THAT one?

~possi