EIC grandchild, great grandchild

[geekgirldany]

Customers have been claiming granddaughter as dependent for several years. She lives with them and is supported by them. In 2007 she turned 19 and had a child. She made under $3000 in 2007. Father of child is not in the picture. The granddaughter and great granddaughter both live with my customer.

Are my customers/grandparents/great able to claim the great grandchild for EIC? I am not sure by my reading if she is the qualifying child of the mother (grand daughter) or of the grandparents. I am taking the grandchild/mother as a dependent and claiming EIC. I think this is correct. But I am unsure about the great grandchild. I believe they can claim great grandchild as dependent but I am unsure on EIC.

Appreciate any help.
Thank you

[Black Bart]

Dany,

I think you'e okay on the great-grandchild. All that's required to be a qualifying child is to be a descendant, be under age 19, and live with you over half the year. Great-grandchild meets those tests.

But, are you saying you're also taking EIC on the grandchild/mother? She's 19 isn't she? Sounds like you'd be okay on the dependency because her income's under $3K, but too old for grandmother to claim EIC on her.

[geekgirldany]

I got that wrong she was 18 in 2007. Just turned 19 this month.

Let me ask this do I mark the great grandchild as "grandchild" on relationship? Or do I put "Other"? If I put "other" there is no EIC calculated if I put grandchild it calculates for the greatchild.

Also should I check on the questions that the mother could claim the child for EIC? She only made a few hundred dollars. So I don't think that applies.

Thanks Bart I appreciate you answering.

[Black Bart]

...Let me ask this do I mark the great grandchild as "grandchild" on relationship? Or do I put "Other"? If I put "other" there is no EIC calculated if I put grandchild it calculates for the greatchild.

I would mark it "grandchild" since there's no "great-grandchild" on the list and it's only a question of what degree of grandchild it is (great or great-great, etc.). The IRS computers aren't matching or cross-checking on that sort of thing anyway, so I think it'll go right on through like that without a hitch. About choosing "other" -- it must be a thing with your program because I tried it both ways on a dummy return and my (ATX) program calculated EIC okay using both "other" and "grandchild."

Also should I check on the questions that the mother could claim the child for EIC? She only made a few hundred dollars. So I don't think that applies.

Actually, I don't think the mom is eligible to claim the kid for EIC because the mom is a qualifying child of her grandmother. Here's a quote from IRS EIC publication:

"You cannot be a qualifying child of another. You are a qualifying chid of another person if all of the following statements are true:
1. You are that person's...grandchild... (and a list of all the other relatives)
2. ...you were under age 19...
3. You lived with that person...for more than half the year."

[geekgirldany]

Thanks so much Bart!. Really appreciate it. This EIC thing can be sticky and just wanted to make sure I was marking everything correctly.