My taxpayers have a disabled sister living with them, and they usually qualify for EIC.
This year, I see that the sister had some stock sales for about $20k (gross, not net).
Is there a gross income test to pass for a disabled sister dependent?
Or does she fall into the same rules for dependent child, as I read this:
Qualifying Child
For purposes of the Earned Income Credit, a child must
meet all of the following four tests.
1) Relationship. The child must be the taxpayer’s son,
daughter, stepchild, foster child, or a descendant
of any of them (for example, a grandchild), or
brother, sister, half brother, half sister, stepbrother,
stepsister, or a descendant of any of
them (for example, niece or nephew).
2) Age. The child must be under age 19 at the end of 2012, and
younger than the taxpayer (or spouse if filing jointly); under age
24 at the end of 2012, a student, and younger than the taxpayer
(or spouse if filing jointly); or permanently and totally disabled
at any time during 2012, regardless of age.
3) Residency. The child must have lived with the taxpayer in the
United States for more than half of 2012. Residence in Puerto
Rico or a U.S. possession, such as Guam, will not qualify. A
child who was born or died in 2012 is treated as having lived
with the taxpayer for all of 2012 if the taxpayer’s home was the
child’s home the entire time he or she was alive in 2012.
4) Joint return. The child cannot file a joint return for the year.
Exception: The joint return test does not apply if the child and
his or her spouse file a joint return only to claim a refund.
The support test for dependents does not apply for purposes of
the EIC. A child who meets all requirements can be a qualifying
child even if the child provides over half of his or her own support.
If the parents of a child can claim the child as a qualifying child
but no parent claims the child, no one else can claim the child
unless that person’s AGI is higher than the highest AGI of any
of the child’s parents who can claim the child.
This year, I see that the sister had some stock sales for about $20k (gross, not net).
Is there a gross income test to pass for a disabled sister dependent?
Or does she fall into the same rules for dependent child, as I read this:
Qualifying Child
For purposes of the Earned Income Credit, a child must
meet all of the following four tests.
1) Relationship. The child must be the taxpayer’s son,
daughter, stepchild, foster child, or a descendant
of any of them (for example, a grandchild), or
brother, sister, half brother, half sister, stepbrother,
stepsister, or a descendant of any of
them (for example, niece or nephew).
2) Age. The child must be under age 19 at the end of 2012, and
younger than the taxpayer (or spouse if filing jointly); under age
24 at the end of 2012, a student, and younger than the taxpayer
(or spouse if filing jointly); or permanently and totally disabled
at any time during 2012, regardless of age.
3) Residency. The child must have lived with the taxpayer in the
United States for more than half of 2012. Residence in Puerto
Rico or a U.S. possession, such as Guam, will not qualify. A
child who was born or died in 2012 is treated as having lived
with the taxpayer for all of 2012 if the taxpayer’s home was the
child’s home the entire time he or she was alive in 2012.
4) Joint return. The child cannot file a joint return for the year.
Exception: The joint return test does not apply if the child and
his or her spouse file a joint return only to claim a refund.
The support test for dependents does not apply for purposes of
the EIC. A child who meets all requirements can be a qualifying
child even if the child provides over half of his or her own support.
If the parents of a child can claim the child as a qualifying child
but no parent claims the child, no one else can claim the child
unless that person’s AGI is higher than the highest AGI of any
of the child’s parents who can claim the child.
Comment