Eic eligibility

[patavid]

Client lives with 31 year son and 12 year old grandson whose father is the 31 year old son. Client's AGI is $28000 and son's AGI is $19000. Both the client and 31 year old son meet all four tests. As I interpret Example 1 on page 18 of Pub 596, the 31 year old father is the only person who can claim the EIC unless he CHOOSES not to. In that case then, the client can claim the EIC due to the higher AGi. In other words, the client needs her son's approval to claim the EIC and therefore cannot arbitrarily claim the credit. ( Client is entitled to claim 12 year old as dependent. She has legal custody via court decree )

TIA

[Snaggletooth]

Consent Not Necessary

I think you are correct Pat, except your language implies that the 31-yr old son needs to agree or give consent to his mother to claim EIC for the child.

Effectively this may sound correct, but all that is necessary would be for the 31-yr old son to FAIL to claim EIC on the child. No formal consent is required.

Even though his mother has higher AGI, the son has tie-breaker because a parent has higher priority than a grandparent.

[Koss]

Tie Breaker

In general, I agree with Snaggletooth's observation, i.e., that explicit consent is not required, and that the grandparent may claim the child if the parent does not claim the child.

However, in this particular case, the grandparent may have a stronger claim than the parent. The original post says that the grandparent has "legal custody via court decree." That may place the grandparent in the position of a foster parent, as this term is defined by the Internal Revenue Code. And a foster parent generally has the same rights as a natural parent.

On this interpretation, if both the natural parent and the foster parent claim the same child, the foster parent would win the tiebreaker rules because she has the higher AGI.

Moreover, the "court decree" may have effectively stripped the father of his parental rights. He may have no claim at all. You really have to read the court order to figure this one out. But if the father does not intend to claim the child, then I agree that it's not really an issue.

BMK