Question

Under what circumstances can a college student qualify for the earned income credit?

Answer 1

EITC, Earned Income Tax Credit

EITC, Earned Income Tax Credit, is a benefit for working people who have low to moderate income. A tax credit means more money in your pocket. It reduces the amount of tax you owe and may also give you a refund.

EITC is also called EIC or Earned Income Credit.

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.

Qualifying child

Your 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.

Relationship

To be your qualifying child, a child must be your:

• Son, daughter, adopted child, stepchild, eligible foster child, or a descendant of any of them (for example, your grandchild), or
• Brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them (for example, your niece or nephew).

Definitions to clarify the relationship test

Adopted child.  An adopted child is always treated as your own child. This includes a child who was placed with you for a legal adoption by an authorized adoption agency

Eligible Foster Child.  A person is your eligible foster child if the child is placed with you by an authorized placement agency, or by judgment, decree, or other order of any court of competent jurisdiction. Authorized placement agencies include a state or local government agency or an Indian tribal government. It also includes a tax-exempt organization licensed by a state or an Indian tribe.

Residency Test

Your child must have lived with you, or your spouse if you file a joint return, in the United States for more than half of the year.

Joint Return Test

Your child must not have filed a joint return or if your child filed a joint return, your child and his/or her spouse filed only to claim a refund and were not required to file.