Eic

[Snaggletooth]

This thread starts the same as the one below "Borderline EIC Qualifier." Bart has the only response, but there have been at least two posts deleted - one which I've seen, and one of my own. I think there's something wrong electronically, so I'll throw it out again. Please do NOT respond to the thread below -- your response will not survive. Respond to this one, please, if you care to... The story goes like this:

One lady who earns little more than minimum wage, tries to make a living for herself and an extreme mentally-deficient 21 year old son. Son had not been able to hold down a job because of this and other behavior problems. I know this family very well, such that if I were ever under scrutiny, I could not claim I was unaware of the situation.

In 2004, she had sought disability for her son. State DHS told her that the son was unfit for employment and recommended that he NOT work. She was able to produce a letter from doctor's office that her son was deficient. There are problems in qualifying for EIC, which of course this woman desperately needed. Firstly, the son was too old, secondly he had a small W-2, thus difficult to claim he was "totally and permanently disabled." I was naturally quite hesitant to claim EIC, but I composed a letter for her signature explaining the situation exactly as I described it above, and asked that the IRS determine his eligibility. We filed her return with this letter, plus the doctor's statement, and she received her EIC.

Now we face 2005, and here are the facts. Instead of paying disability to this 22 year old, the State DHS has an arrangement with certain employers who agree to furnish sporadic work which requires little thinking or skill. The son will have a W-2 this year for around $3500 or thereabouts. Woman will certainly want EIC again this year and needs it just as badly now as then. I'm not sure whether the W-2 will come from the employer or from the State.

So my question becomes: Is this 22-year old son a "qualifying child" for EIC purposes? There are no other relevant facts than those I have presented here. Is there such clear evidence against her that I can be penalized, or can this be considered a "grey area?"

[Bees Knees]

The real issue is whether he is permanently and totally disabled. If he is, he is her qualifying child.

The income is not enough to say he is supporting himself. I suppose you are raising the income issue only in the context of whether that would indicate he is not permanently and totally disabled.

The code defines permanently and totally disabled at Section 22(e) where it says:

“An individual is permanently and totally disabled if he is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. An individual shall not be considered to be permanently and totally disabled unless he furnishes proof of the existence thereof in such form and manner, and at such times, as the Secretary may require.”

Obviously it is a matter of interpretation, so my advice would be to go for it. Earning $3,500 a year does not sound like substantial gainful activity to me. It sounds more like charity work – giving him something easy to do just to keep him busy and feel a sense of accomplishment. I doubt that type of job would exist for someone who was not permanently and totally disabled.