Deranged Dependent

[Snaggletooth]

Louise's son is 24-years old and mentally deranged. In prior years, the son has worked in menial jobs, and one year even made $12,000 stacking lumber at a sawmill. Louise has never made more than $18,000 herself.

The son became progressively worse over the years, and is now receiving disability from SSI. Louise has not claimed her son as a dependent, but he is a qualifying child for EIC purposes and I have been filing her taxes and claiming EIC on her tax return.

Late in 2008, the son became so depraved that he had to be forcibly removed from Louise's home. During 2009, the son will be a resident at a state mental health facility.

Question: For purposes of EIC, does the son still qualify with respect to residency? I don't see where he can, but sometimes these definitions can become very elastic. I have consulted TTB p.3-18 under "Exceptions to time lived with the taxpayer." He would qualify as "temporary absences for special circumstances" but at some point the "temporary" nature gets stretched. He has been under state care since November 08 and there is little hope that he will be released.

[erchess]

My Two Cents

If she maintains his space (room or part of a room) and any belongings he didn't take with him as if in place for him to return at any moment she should be fine claiming that the absence is temporary until he either dies or becomes well and lives on his own. I would specifically and concretely give this advice to someone whose child was in a normal prison under a sentence of life or even of death.

On the other hand, I freely admit that I am going beyond what I can prove because none of the cites I offer is exactly on point. However if you will take a look at them your comfort level with what I said may increase if you will buy into the premise that rules for EIC follow rules for dependency except when otherwise is clearly spelled out. I didn't write down the cite for that in Kleinrock's own analysis and I looked in vain for it later but I did see something to that effect. .

Revenue Ruling 66-28
Hein v Comm 28 TC 826
Rowe v Comm 128 TC 13
Williams v Comm 53 TC 58

The other side of the coin is that I believe all of these cases involved dependency not EIC. My 45 minutes of research in Kleinrock's Total Tax Office did not turn up any evidence that exactly your situation has been foreseen in the tax code or litigated in court.

Maybe one of our really top researchers such as Bees or NYEA or someone who just happens to know the answer will post here.

[Snaggletooth]

Very Helpful

Good reading material, Erchess. Thank you for spending the time in researching.

I believe the relevance in these court cases, and their application to this situation with this young man, hinges entirely on whether the residence with the State is temporary or permanent. The reading in these cases, even though applying to dependency deduction, seems to imply the same would apply for EIC.

The state HAS indicated the young man can be released on weekends to visit with his mother. I think my course of action as preparer is to determine how permanent his residency in the mental health facility will be. I have knowledge of this family, and how his situation has deteriorated, and I don't think he will ever return to society. But if reading the state documents may treat him as being in rehabilitation for return, I may feel confident in filing her for EIC again.