Earned Income Credit (EIC)

Are you qualified for EIC ?

OLT TAX CORNER ~ Earned Income Credit
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 OLT TAX CORNER ~ Earned Income Credit
Earned Income Credit FAQ
1.What is the EIC?
2.How do I know if I qualify for EIC?
3.In order to claim the Earned Income Credit, does the child have to be claimed as a dependent?
4.If the noncustodial parent receives permission from the custodial parent to claim a child on his or her tax return, is the noncustodial parent eligible for the Earned Income Credit?
5.If both parents want to claim the Earned Income Credit, who is entitled to it if there was no marriage?
6.My EIC has been disallowed in the past, is there any way I can still claim the Earned Income Credit?
7.I have two children, last year I claimed one as a dependent, and my ex-husband claimed the other. However, I claimed both children for EIC because they live with me full-time. My ex-husband was not able to claim his dependent for EIC. What did I do wrong?
8. I am 65 years old and did not work last year. I have an 11 year old son. Am I entitled to claim EIC?
9.All of my income this year was from unemployment compensation. Can I take the earned income tax credit?
10.Can I claim the Earned Income Credit if I don't have a dependent?

What is the EIC? Top
The earned income credit (EIC) is a tax credit for certain people who work and have earned income within certain requirements depending on if you have children and your income.
You could qualify for EIC if your income is under the requirement for your filing status.
How do I know if I qualify for EIC?Top
There are fifteen rules to qualify you:
  • Rule 1. Your Adjusted Gross Income (AGI) Must Be Less Than the Qualifying Amounts
  • Rule 2. You Must Have a Valid Social Security Number (SSN)
  • Rule 3. Your Filing Status Cannot Be Married Filing Separately
  • Rule 4. You Must Be a U.S. Citizen or Resident Alien All Year
  • Rule 5. You Cannot File Form 2555 or Form 2555-EZ
  • Rule 6. Your Investment Income Must Be $3,150 or Less
  • Rule 7. You Must Have Earned Income
  • Rule 8. Your Child Must Meet the Relationship, Age, and Residency Tests
  • Rule 9. Your Qualifying Child Cannot Be Used By More Than One Person To Claim the EIC
  • Rule 10. You Cannot Be a Qualifying Child of Another Person
  • Rule 11. You Must Be at Least Age 25 but Under Age 65
  • Rule 12. You Cannot Be the Dependent of Another Person
  • Rule 13. You Cannot Be a Qualifying Child of Another Person
  • Rule 14. You Must Have Lived in the United States More Than Half of the Year
  • Rule 15. Your Earned Income Must Be Less Than the Qualifying Amounts
For more information on EIC IRS Publication 596
In order to claim the Earned Income Credit, does the child have to be claimed as a dependent? Top
A qualifying child for the Earned Income Credit does not need to qualify as a dependent unless he or she is married.
If the noncustodial parent receives permission from the custodial parent to claim a child on his or her tax return, is the noncustodial parent eligible for the Earned Income Credit?Top
The noncustodial parent cannot claim the Earned Income Credit on the basis of that child because the child did not live with that parent and does not meet the residency test. The custodial parent may be able to claim the Earned Income Credit.
If both parents want to claim the Earned Income Credit, who is entitled to it if there was no marriage?Top
If the child is a qualifying child of both parents, they may choose which one will claim the credit. If there are two qualifying children, each parent may claim the credit on the basis of one of the children or one parent may claim the credit with both children. If both actually claim the credit on the basis of the same child or children, the parent who is entitled to the credit is the parent with whom the child lived for the longest period of time during the tax year, or the parent with the higher Adjusted Gross Income (AGI) if the child lived with each parent for the same amount of time during the year.
My EIC has been disallowed in the past, is there any way I can still claim the Earned Income Credit? Top
Yes. If your earned income credit (EIC) for any year after 1998 was denied (disallowed) or reduced by the IRS, you may need to complete an additional form to claim the credit. Form 8862, Information To Claim Earned Income Credit After Disallowance is the form you will need to complete in order to claim EIC. For more information you can read about the Disallowance of EIC on the IRS website at:
Publication 596
I have two children, last year I claimed one as a dependent, and my ex-husband claimed the other. However, I claimed both children for EIC because they live with me full-time. My ex-husband was not able to claim his dependent for EIC. What did I do wrong? Top
A social security number can only be claimed for EIC once. In other words, two people cannot claim the same child for EIC. You will need to talk with the other person to decide who will claim the child for EIC. If you cannot decide, then there are guidelines laid out by the IRS. Only one of you will be able to claim the credit using that child, as follows:
  • The parents, if they file a joint return,
  • The parent, if only one of the persons is the child’s parent,
  • The parent with whom the child lived the longest during the year, if the two persons are parents of the child,
  • The parent with the highest AGI if the child lived with each parent for the same amount of time during the tax year, or
  • The person with the highest AGI, if none of the persons are the childs parent.
I am 65 years old and did not work last year. I have an 11 year old son. Am I entitled to claim EIC?Top
No. You must be at least 25 but under 65 years old at the end of the tax year in order to qualify to claim EIC.

Note: If married filing joint only one spouse needs to meet the requirements.
All of my income this year was from unemployment compensation. Can I take the earned income tax credit?Top
No, the earned income tax credit is only for individuals with earned income. Unemployment compensation is not considered earned income but will be used if additional income is earned and it makes the EIC a less amount.
Can I claim the Earned Income Credit if I don't have a dependent?Top
You may still be able to if your adjusted gross income is under the EIC requirement for single filer without dependent.


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