EIC Requirements vs HH

[Snaggletooth]

Taxpayer just turned 26 and works part-time, with maybe $8K total income as a part-time hairdresser. Lives with grandparents, who support the household with much higher income levels.

Unquestionably, a taxpayer must be the chief support of the household to file as HH. This can be done with non-taxable income if it looks like the taxable income is insufficient. My 26-year-old cannot qualify as HH, and with only $8K total income, it wouldn't do her any good anyway.

EIC requirements, however, include in their questionnaire whether taxpayer's self-employment income is sufficient to support. In this case, obviously not. However, aside of this, for a taxpayer with no children, the qualifications do not mention adequacy of support.

I guess if I have a question, it might be "Without a child, does mere existence qualify for EIC, or must there be some modicum of support?"

Comments?

[BP.]

EIC requirements include in their questionnaire whether taxpayer's self-employment income is sufficient to support.

Where have you found this EIC requirement?

Without a child, does mere existence qualify for EIC

EIC chart on TTB 11-9 - Column titled "Rules Without a Qualifying Child"

[Snaggletooth]

Self-Employed

Where have you found this EIC requirement?
It is not a "requirement" in that sense of the word, but it is on the questionnaire for self-employed taxpayers.


EIC chart on TTB 11-9 - Column titled "Rules Without a Qualifying Child"

I've never seen support listed as a requirement, but by virtue of no mention doesn't specifically answer with a "yes" or "no."
I gather support is not necessary.

Thanks.

[ChEAr$]

And filing status as HOH not necessary either for a single woman like described living with parents/grandparents.
No problem using Single status.

[BP.]

"Originally Posted by BP.
It is not a "requirement" in that sense of the word, but it is on the questionnaire for self-employed taxpayers."

Get your quotes right. This isn't my statement; it's yours. I don't know about the EIC questionnaire asking self employed people about support.

[Koss]

EIC and Support

I agree with previous comments that there is no requirement that the taxpayer be supporting himself or a qualifying child for EIC. For a qualifying child, the requirement is that the child not provide more than half of the child's own support.

For EIC without a qualifying child, there is no explicit requirement that the taxpayer be providing his own support.

There does appear to be a question about support in the tax forms.

Observation: If self-employment income is the only source of income, and there is no savings, or student loans, or gifts from family, and the self-employment income is not enough for the taxpayer to be financially self-sufficient, it raises the possibility that the taxpayer may be the dependent, or qualifying child, of another taxpayer. This may, in some cases, trigger a responsibility for the tax professional to make additional inquiries.

Long before you get to EIC, your software expects you to mark a box if the taxpayer can be claimed as a dependent by someone else. If you did not mark that box, then you have effectively answered "no" to the question, "Can the taxpayer be claimed as a dependent?" That "answer" is arguably inconsistent with certain other facts, such as, for example, the taxpayer had only $3,200 in income during the entire year.

It is certainly possible that a taxpayer who made only $3,200 is not the dependent of anyone else. But on the surface, it appears rather odd. Remember that someone else may be able to claim them as a dependent under the qualifying relative rules, because their gross income is less than the personal exemption.

Both facts may well be correct. A taxpayer can have very low income and nevertheless not be a dependent. But due diligence for EIC means, among other things, that the tax pro cannot ignore inconsistent facts, and must make reasonable inquiries when the facts are not clear.

BMK

[Snaggletooth]

Getting Quotes Right

Get your quotes right. This isn't my statement; it's yours. I don't know about the EIC questionnaire asking self employed people about support.

BP, something about the way I made the data entry in this post actually INSERTED my statement into your quote and I couldn't get it corrected. Making changes to someone else's quote is not something I would intentionally do and I apologize that it happened. I appreciate your response to this thread and would not have you offended under any circumstances.

There used to be a famous Worksheet in the Instructions totally dedicated to self-employed people. It has been changed, or if it is still around I can't seem to find it. The question was asked whether the income was sufficient to support the taxpayer and/or kids. Drake has reproduced this question in their five 8867 sheets which must be filled out by the preparer.

Off-topic, but the self-employed section also asks questions designed to stop a self-employed person from increasing their income to fall in the EIC "sweet spot" of maximum value.