EIC question

[oceanlovin'ea]

Here is the scenario:

Child lives with mother and stepfather. Child is teenager just graduated from HS. Parents take turns claiming child. 2009 was not mother's year to claim child. Parents do not communicate very well except through going to court through the years. Mother doesn't know father's finances.

Mother's income is under EIC limits. Child lived with her. Child filed a tax return last year because she worked for a while. Not sure if father actually claimed her or if she claimed herself.

If I answer the EIC questions that I am asked in my program, it gives her EIC. I don't want this to go through and then she has to give it back because of what the father did on his return.

Does she qualify for EIC? Am I missing something?

Linda

[OtisMozzetti]

Issues that I see would be as follows: 1. Does the "teenage" child meet the age requirement? If the child attained age 19, then the child had to be a full-time student for some part of 5 months of the year. 2. Did the non-custodial father file a claim for EITC for the child? If so, the mother may find it necessary to document to the IRS's satisfaction that the child lived with her. 3. Did the mother and stepfather (who filed a joint return?) have investment income more than the limit amount?

[JG EA]

Yes, as said an important point here is member of the household test.
TTB page 3-17

Tie breaker rules. No other person can take any of the fi ve tax
benefi ts listed above unless he or she has a different qualifying
child. If the taxpayer and another person claim the same child as a
qualifying child, the IRS will apply the following tie breaker rules:
•...• If two of the persons are the child’s parents, the child will be
treated as the qualifying child of the parent with whom the
child lived for the longer period of time in 2009. If the child lived
with each parent for the same amount of time, the child will be
treated as the qualifying child of the parent who had the higher
AGI for 2009.

[appelman]

I would say to take the credit.

As OtisMozzetti says, you may have to document the claim if the father also made a claim. If the kid has just graduated from high school, I presume he meets the criterion of being a full-time student for parts of 5 months. (If you answered the interrogatories correctly, your software should take care of this. It should also take care of the investment income issue.)

To JG EA: Note the exception for children of divorced or separated parents.

[Peachie]

This means not one whit

I know. According to the scenario though, 2009 wasn't the mother's year. Just a comment.

Peachie

[spanel]

EIC can only go to the person the child lives with. In this case, the father could never get eic on the child.. reguardless if its his year or not.


Chris

[oceanlovin'ea]

thanks

Child did live with mother. No investment income. Don't know what father did on his return. But of course she can prove child lived with her. She was in high school and then started college. So she is still a student.

I appreciate your help. Since it is quite a large amount of EIC, I wouldn't want her to spend the money and then have to pay it back. I would feel horrible.

Linda

[OtisMozzetti]

...Don't know what father did on his return. But of course she can prove child lived with her.
...
Since it is quite a large amount of EIC, I wouldn't want her to spend the money and then have to pay it back. I would feel horrible.

Linda

If the father actually did claim the child, then even if your client taxpayer might have spent the money, she might get an IRS letter telling her to "pay back the EIC" ($X) unless she can substantiate to the IRS the requirements of the EIC claim. Even if the client taxpayer might not ultimately have to pay it the EIC money back, she would have to worry about the outcome while the IRS is sorting out whether or not she has properly substantiated her claim.

[taxmom34]

OP stated it was not mother's year to claim the child. the child lives with mother, to qualify for EIC the child does not need to be your dependent, so it doesnt matter that father claimed child or not.

[appelman]

The money might justify a bit of worry and nuisance

I presume we are talking about the father claiming the child for EITC. That's the only thing that would cause trouble, and he would have to have a lot of chutzpah and/or an incompetent preparer to do that.

[Bonnie]

If father did claim EITC he would be the one who has to pay it back because he is not entitled to it. Only the person the child lives with is entitled to the EITC.