TP w/TP's 2 kids, all live with TP's parents. TP's parents claim 2/kids as dependents on their tax return, TP claims them for EIC on TP's tax return. Anything wrong with this picture?
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Lots wrong
How can the TP take EIC without a dependent or HOH with a non-dependent? He(she) obviously is not HOH if the parents provide enough support to claim the children over the TP.
TP might be eligible for EIC on their own income with no dependents but not on the children.AJ, EA -
Most definitely. The kids could be qualifying dependents of both the parents and the taxpayer. In that case they need to decide amongst themselves who will take the dependency deduction AND the EIC, but you can not split them. If they cannot agree you need to go through the tiebreaker rules.Originally posted by AZ-Tax View Post
The only time you can split the dependency exemption and the EIC is if you are the custodial parent ALLOWING the noncustodial parent to take the exemption for your dependent. You either qualify for EIC or you don't - it is not something you can delegate. However, the child can be a qualifying child for more than one person, again, then you need to decide who is to take the EIC and if you can't decide the tiebreaker rules come into play.Comment
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No HOH
So, we have the grandparents, the parent, and the kids....
The parent can claim the kids and file as "single" if the parent is indeed not the HOH, and still qualify for EIC, right?"I am proud to pay taxes in the United States. The only thing is I could be just as proud for half the money." Arthur GodfreyComment
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I would say correct. The only way the parent could claim HOH is IF the parent provided more than 1/2 the cost of keeping up the home, and if that were the case the children would not be qualifying as dependents of the grandparents.Originally posted by Possi View Post
Did I say that right?Comment
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Jesse, I believe this is what we have here.....
[QUOTE=The only time you can split the dependency exemption and the EIC is if you are the custodial parent ALLOWING the noncustodial parent to take the exemption for your dependent. You either qualify for EIC or you don't - it is not something you can delegate. However, the child can be a qualifying child for more than one person, again, then you need to decide who is to take the EIC and if you can't decide the tiebreaker rules come into play.[/QUOTE]
I believe that is what we have here. The Custodial parent or the TP filing Single, taking the EIC for his children and allowing his parents (the grand parents of the children) to take the 2 children as dependents. Both TP and his 2 children live with TP's parents. The tax preparer before me has the TP with 1 exemption and the Grand Parents with 4 exemptions with the TP receiving EIC for the 2 children.
Now, I am a little confused how to answer # 13a on part 2 of the EIC checklist. it seems #9 in part 2 could also be answered yes for the children are descendants of the Grand Parents.Comment
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You are correct, it would be yes, and the next question then would be "If the tiebreaker rules are applied would the child be treated as taxpayers qualifying child? Answer would be NO, with the H (Proseries?) in the dependent code box on your information sheet. So either:Originally posted by AZ-Tax View Post
1) taxpayer (parent) can file single, dependency deductions, and EIC
OR
2)taxpayer (parent) can file single NO dependents, NO EIC and the Grandparents can take the dependency deductions.
AZ-Tax - I assumed the answer would be no with the Grandparents having higher income?Comment
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similar situation
I have baby and teenage mother living with the teen's grandparents. (Actually, the grandfather isn't really the grandfather and the couple are not married.)
The grandmother is disabled and only receives SS. "Grandfather" works and has around 30k income.
The teen earned a little less than 10,000.
I plan to file her as single with the baby, as she will benefit from EIC. (She did not provide over half the support, so fs will be single.)
The grandparents then cannot claim either their granddaughter or great granddaughter."I am proud to pay taxes in the United States. The only thing is I could be just as proud for half the money." Arthur GodfreyComment
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good answer
Clear as it can be.
If you haven't been told today, you are good...."I am proud to pay taxes in the United States. The only thing is I could be just as proud for half the money." Arthur GodfreyComment
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Although my profile is not detailed, as you can see I've been a member of TTB board since 2005. TTB is my Bible and I have learned more from this board than I could have in any classroom. I have asked many questions and received so many answers. I appreciate receiving assistance and I take great pleasure in being able to help others when I can.
I appreciate all the good people on this board and I do not mean to short anyone, but I must say I have learned my "search skills" from S T; and the ability to really think it through especially when it involves EIC and dependency from Burton Koss.Comment
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Actually Grand Parents may not qualify for EIC...
I changed the the ProSeries Info wksht to H opposed to E and it converted the TP into a 1040EZ w/no EIC.
I looked at the Grand Parents tax return and it looks like they have no earned income. Only 1099-R income, little bit of interest and a little Sch E income. I went into the info wksht and entered E in the EIC code and ProSeries would not generate an EIC.
In that case, what should the TPers EIC code be now in ProSeries?Comment
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If grandparents AGI is higher than parents they still win tiebreaker rules. It does not matter that they have no EIC or if income is too high to qualify for EIC. The dependency exemption and EIC can not be split.*
Your only options are:
1) taxpayer (parent) can file single, dependency deductions, and EIC
OR
2)taxpayer (parent) can file single NO dependents, NO EIC and the Grandparents can take the dependency deductions.
*The only time you can split the dependency exemption and the EIC is if you are the custodial parent ALLOWING the noncustodial parent to take the exemption for your dependent.
What is the AGI of Grandparents? If they decide between themselves maybe it would be more beneficial for parent to take EIC and dependency exemptions? No matter what, it's one or the other if they both qualify to take the credit, they can not be split.
Just because you have no earned income or your AGI is too high does not mean you do not have a qualifying child, it just means you have a qualifying child but are not able to receive any EIC. Does that make any sense?Comment
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Jesse, thank you
Thank you for clearing that up. What a nightmare this EIC has the potential to be.Comment
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Ain't that the truth. If you still need further clarification send a Private Message to Burton Koss - he has a much better way with words than I and is very thorough on his explanations.Comment
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One last question.....
Should I suggest to the TP that he amend his 2007 tax return for which he already claimed and received EIC credits on him and his kids w/o claiming his 2 kids as dependents?
Actually, it could be a wash if the Grand Parents amend and the TP claims the 2 kids as dependents, for EIC and child tax credit thus increasing his refund while the Grand Parents amend by removing the 2 kids from their 2007 tax return therfore probably resulting in paying in.
Why would ProSeries give us users the option under "date of birth" (Code Q) of "not a dependent child (but is qualifying person for earned income credit and/or the child tax credit and/or the credit for child dependent card expenses)" in the info wksht?Comment
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