Hi. Everyone I have a question.....My two children and I live with my father. He claimed HOH, and my children (his grandchildren) as dependents, he was unable to claim EIC due to his income, he was unable to claim me as a dependent due to my income...my question is even though I am not claiming my children as dependents, can I use them as qualifying children and claim EIC.
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Eic
No!!! Read the tie-breaker rules! -
Yes and No
Good day,Originally posted by jennit View Post
If you do claim both children on your return (for EIC purposes), then your father is not able to claim either one for HOH status and he should therefore file a Form 1040X with a filing status of Single and no dependents. Since he would lose HOH status, and the two dependent's exemption, he would undoubtedly owe the IRS some $$.
If you do not claim the children for EIC purposes, your question is moot BUT your return will now have a smaller refund since you would not be claiming EIC with children.
The real question is "Do you want to do this to dear old dad?"
Presumably as HOH he is paying more than 1/2 of the housing cost where y'all reside; since he claimed the grandchildren as dependents, he is presumably paying more than 1/2 of their living expenses. So, bottom line -- seek competent tax advice to get an accurate answer on what would be the bottom line for both of y'alls returns and then talk with your dad about those numbers in comparison with the various costs he is shouldering.
P.S. - the earlier answer about tie-breaker rules is irrelevant since tie-breaker rules apply only in situations where two (or more) individuals claim the same person(s) for EIC purposes - this is not your case. Even if it were, in the situation where a parent and a non-parent claim the same individual, the parent "wins".
P.P.S. - one other possibility exists - Dad claims only grandchild A as a dependent while you claim only child B for EIC purposes (he would have to file a 1040X to now show only one dependent. This may or may not lower his refund, it depends on income level and other credits on his return). The only way to see if this is advantageous is to run the numbers on both returns and then look at the bottom line. Seek competent tax advice.
Hope this helps.Just because I look dumb does not mean I am not.Comment
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Thank You. Mr. Bickle...that was very helpful. It is definately more beneficial for Grandpa the claim the children as dependents, even with the loss of EIC.Comment
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Thank You. Mr. Bickle...that was very helpful. It is definately more beneficial for Grandpa the claim the children as dependents, even with the loss of EIC.
I was confused...I was using an online tax prep program.....it allowed me to use them as qualifying children without claiming them as dependents. That's why I wanted a second opinion before filing. I don't want to irritate the IRS.Comment
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glad to be of help
Your situation [dad, you, and the children all in one household] was actually "clarified" by the IRS on 12/18/2007 and the information I gave you was based on that clarification. I am not surprised that some online/off-the-shelf software program does not incorporate that clarification.Originally posted by jennit View Post
May I gently recommend something? In situations such as this, it is often very helpful if both you and your father consult a competent tax preparer together. By doing so, that tax preparer can show you both the bottom line results almost instanteously [and that preparer should be aware of last minute notices from the IRS].
Oh, by the way, Mr. Bickle is my father; I am "Hey, You" [sometimes "Hey, Bud"].Just because I look dumb does not mean I am not.Comment
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