sch m

[michelh]

It is our understanding that to get the sch m credit you must have been employed and received a w-2. that self employed and itin do not qualify for the credit. do itin taxpayers with spouses who qualify also gualify or do neither get the credit due to the itin issues - especially if resident aliens meeting the resident test. and is it different for resident aliens with a green card.

[dyne]

It is my understanding that ALL earned income qualifies including sch C profit,
Farm profit and earned income reported on a K-1.

[Koss]

Schedule M

(1) Net profit and net loss on Schedule C is used to calculate the credit. See the worksheet in the instructions for Schedule M.

(2) To claim the credit, the taxpayer must have a social security number.

It does not matter whether the taxpayer is a US citizen, resident alien, or nonresident alien. It does not matter whether they have a green card. It does not matter whether they meet the substantial presence test.

If the taxpayer has an SSN, they are eligible for the credit. If they don't have an SSN, they are not eligible for the credit.

[Clarification: A taxpayer filing Form 1040NR cannot claim the credit even if they have an SSN.]

(3) In the case of a couple filing a joint return, it is sufficient for one spouse to have an SSN. If the other spouse has an ITIN, they are eligible for the credit as a married couple. Both incomes are used in the calculations.

If a married person with an SSN files a separate return, it does not matter whether the spouse has an SSN, an ITIN, or no number at all. A taxpayer who has an SSN, and is filing MFS, may claim the credit.

BMK

BMK

[michelh]

sch m - additional question

what if the tax software says that in diagnostics that the couple do not qualify and then the credit appears on the return. If one spouse meets qualifications it is understood that both would get, BUT....
If one has valid SS# and the other has ITIN with no SS# would this still apply?

[michelh]

reply to comment from koss

missed that message coming across. it does make sense, but we are not seeing that as we are getting conflicting information in the software program. We are gathering information to confirm software schedule m information is correct or that the diagnostics is correct. So far all returns with this issue are rejected for sch m issues. So trying to gather information to figure this issue out.

[Koss]

Diagnostics

Is it a severe diagnostic, or just an informational warning?

Is it stopping the return from being filed electronically?

That may be a glitch in your software...

BMK

[Koss]

Schedule M

So you actually have an MFJ return where one spouse has an SSN and the other spouse has an ITIN...

Which one is the primary taxpayer?

Take a look at Schedule M. Not in your software... on paper (or PDF).

The form only has a field for one name and number at the top. The software is populating that field with the name and number of the primary taxpayer.

If the primary taxpayer has an ITIN...

Maybe you should put the other spouse on top.

Wild guess. I've been doing this for too many years.

If I'm right, I feel sorry for you. You'll have to start the return all over!



BMK