Question

• Aurora and Oscar separated in 2017 and divorced in October 2019. She earned $40,000 in wages and paid more than half the cost of keeping up her home in 2019.
• Aurora and Oscar have a son, Milo, who is 17 years old and unmarried.
• Aurora signed Form 8332 (Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent) allowing Oscar to claim Milo in 2019.
• Milo is a full-time student working towards a degree in computer information systems. Milo lived on campus during the school year and spent the summer at home with his mother.
• Milo does not a have a felony drug conviction and is not a qualifying child for anyone except Aurora.
• Aurora paid $5,000 of Milo's tuition that was not covered by his scholarship.
• Aurora provided more than half of her son's support and all the cost of his room and board on campus.
• Milo's only income was $3,800 in wages and $400 of dividend income. He had no federal or state tax withholding.
• Aurora and Milo are U.S. citizens and have valid Social Security numbers.

12. Milo is Aurora’s qualifying child for the earned income credit.

True or False?

13. Milo is a qualifying person for Oscar to claim Head of Household filing status, credit for other dependents, and the earned income credit

True or False?

Answer 1

Step 1:

Given information is that:

• Aurora and Oscar separated in 2017 and divorced in October 2019. She earned $40,000 in wages and paid more than half the cost of keeping up her home in 2019.
• Aurora and Oscar have a son, Milo, who is 17 years old and unmarried.
• Aurora signed Form 8332 (Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent) allowing Oscar to claim Milo in 2019.
• Milo is a full-time student working towards a degree in computer information systems. Milo lived on campus during the school year and spent the summer at home with his mother.
• Milo does not a have a felony drug conviction and is not a qualifying child for anyone except Aurora.
• Aurora paid $5,000 of Milo's tuition that was not covered by his scholarship.
• Aurora provided more than half of her son's support and all the cost of his room and board on campus.
• Milo's only income was $3,800 in wages and $400 of dividend income. He had no federal or state tax withholding.
• Aurora and Milo are U.S. citizens and have valid Social Security numbers

To determine:

From the statement we have to determine that whether Milo is Aurora’s qualifying child for the earned income credit or not.

Step 2:

Explanation:

For your child to be qualified for earned income tax credit, following conditions to be met:

1. Age criteria - Child must be under 19 years of age or be a full time student in at least five months of the year and under age of 24.
2. Relationship criteria - Child must be your son, daughter, step child or adopted child.
3. Residency Test - Your child must have lived with you in United States for more than half of the year.
4. Joint Return Test - Your child must not have filed a joint return

Out of two parents, parent with whom child lived most during the year can take credit. But the right will go to the parent with highest adjusted gross income (AGI) , if the child spent equal time with them.

In the present case, Milo is not a qualifying child for anyone except Aurora. Milo is Aurora's qualifying child for the earned income credit when he satisfies all conditions for qualified child. Below are the conditions satisfied:

1. Milo is 17 years old so Age test is satisfied.
2. Milo is Aurora's son so relationship test is satisfied.
3. Milo lives with Aurora in United States for more than half of the year, so residency test is satisfied.Here, Milo's attendance at school is to be considered as temporary absence and those months are counted as time that Milo lived with her for the earned income credit.
4. Milo did not not file any joint return, so joint return test condition is satisfied

So, Milo is Aurora’s qualifying child for the earned income credit is True.

Step 3:

To determine:

Milo is a qualifying person for Oscar to claim Head of Household filing status, credit for other dependents, and the earned income credit determine true or false.

Explanation:

Milo is a qualifying person for Oscar to claim Head of Household filing status, credit for other dependents, and the earned income credit. The statement is false because Milo is a qualifying person for Oscar to claim credit for other dependents only due to following reasons:

1. Head of Household filing status: In the present case, Aurora paid more than half the cost of keeping up a home for the year. This should be paid by Oscar. So, Milo is not a qualified person for credit for qualifying for Head of Household Filing status.
2. Earned Income Credit: In the present case, Milo is a qualified person for earned income credit for Aurora as explained above after satisfying all the conditions. So, Milo is not a qualified person for earned income credit for Oscar.

So, Milo is a qualifying person for Oscar to claim credit for other dependents only.