Client recently divorced and lives with parents for now. She has one dependent who lives with here in the parent's home. No wages but does receive alimony. This would be taxable but can this be used as income for the Earned Income Credit?
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If she endured a bad marriage she certainly did earn it, but in the eyes of IRS is not earned income for EIC. -
Alimony and eitc?
1. TTB PP. 11-9, right column, middle of the page indicates that alimony is NOT considered earned income for purposes of EITC.
2. TTB PP. 13-9, RIGHT COLUMN, under heading Compensation for IRA Contribution purposes, , points out that Alimony is considered compensation for IRA contribution purposes.Friends double; family triple. Don't buy an audit for yourself. If someone has to go to jail make sure it is the client. Remember it is only taxes, nothing important.Comment
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