Question

Glenda Hanson (64) shared a home all year with her son, Dennis (41), and Dennis’s son, Chase (20). Glenda and Dennis worked full time and Chase was a part-time student. No one else lived in the home. Assuming that both Glenda and Dennis have earned income and an AGI of at least $20,000, but less than $30,000, which of them may claim and receive the Earned Income Tax Credit?

Neither Glenda nor Dennis.

Glenda only.

Both Glenda and Dennis.

Either Glenda or Dennis, but not both.

Answer 1

To claim EITC on your tax return, you must meet all the following rules:

• You, your spouse (if you file a joint return), and all others listed on Schedule EIC, must have a Social Security number that is valid for employment and is issued before the due date of the return including extensions
• You must have earned income from working for someone else or owning or running a farm or business
• Your filing status cannot be married filing separately
• You must be a U.S. citizen or resident alien all year (If you are a nonresident alien married to a U.S. citizen or resident alien, see Publication 519, U.S. Tax Guide for Aliens)
• You cannot be a qualifying child of another person
• You cannot file Form 2555 or Form 2555 EZ (related to foreign earned income)
• You must meet the earned income, AGI and investment income limits (income limits change each year), see EITC Income Limits for the tax year amounts
• And you must meet one of the following:
  • Have a qualifying child (see who is a qualifying child below)
  • If you do not have a qualifying child, you must:
    • be age 25 but under 65 at the end of the year,
    • live in the United States for more than half the year, and
    • not qualify as a dependent of another person.

If you qualify for EITC, you have to file a tax return with the IRS, even if you owe no tax or are not required to file.

And a our child is a qualifying child if your child meets all of the following tests:

1. Age
2. Relationship
3. Residency
4. Joint Return

Age

Your child must meet one of the following:

• Be under age 19 at the end of the year and younger than you or your spouse, if you file a joint return
• Be a full-time student in at least five months of the year and under age 24 at the end of the year and younger than you or your spouse, if you file a joint return
• Be permanently and totally disabled at any time during the year and any age

As none of the above critirea was satisfied Neither Glenda nor Dennis were eligible to claim the Earned Income Tax Credit.