Tax question EIC
Posted by Dave Thompson (+66) 14 years ago
Hello..

I have a question to anybody who can answer... concerning wife's tax return...

Ok.. actually.. technically.. she is my ex-wife.. long story... in short... we divorced 3 years ago... I got full custody of our 3 kids... she went one way... i stuck around (OKC) then 2 years ago i moved my kids and I up here... started talkin to exwife, she moved back to us and we have lived together for the past year and a half... and now are in the long process of reconciliation.

anyways.. on MY tax return, I filed single and I claimed all 3 kids for dependants and did the Earned Income Credit (EIC), which according to IRS laws you can only use 1 - 2 qualifying children... which I did... etc etc.. gettin my refund in a couple of days..

Now.. for her return.. she filed single, no dependants... and owes around 300... now for my question:

Even though she cannot claim any of the kids as a dependant, can she still claim the 3rd child for EIC?

According to the tax laws, to claim a child for EIC he or she must have been living with the claimer for 6 or months of the year, and technically, this is true in our situation.

There it is...

any thoughts or answers??

Thanks

Dave
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Posted by Kyle L. Varnell (+3747) 14 years ago
Not being a tax expert it sounds like your wife could claim EIC.

Again check with someone who's better informed than me on this subject but that's my two cents.

[This message has been edited by Kyle L. Varnell (edited 2/13/2008).]
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supporter
Posted by Rick Kuchynka (+4453) 14 years ago
I thought the law was that the child had to derive more than half their "support" from said person claiming the dependant.
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Posted by Tammy (+71) 14 years ago
EIC:

Must I be entitled to claim a child as a dependent to claim the earned income credit based on the child being my qualifying child?

You do not have to be entitled to claim the child as a dependent to claim the earned income credit based on the child being your qualifying child. If, however, the child is married, you must be entitled to claim the child as a dependent unless the reason you are not entitled to claim your married child as a dependent is that you released a claim to a dependency exemption for the child under the special rule for divorced or separated parents or parents who live apart. For more information, refer to Rules 8 and 9, Qualifying Child.


What is the EIC?
The earned income credit (EIC) is a tax credit for certain people who work and have earned income under $39,783. A tax credit usually means more money in your pocket. It reduces the amount of tax you owe. The EIC may also give you a refund.

Can I Claim the EIC?
To claim the EIC, you must meet certain rules.

Earned Income Credit in a Nutshell

First, you must meet all the rules in Chapter 1.

Second, you must meet all the rules in Chapter 2 and 3, whichever applies.

Third, you must meet the rule in Chapter 4.

Chapter 1.
Rules for Everyone Chapter

1. Your
adjusted gross income (AGI) must be less than:
 $37,783
($39,783 for married filing jointly) if you have more than one qualifying child,

 $33,241 ($35,241 for married filing jointly) if you have one qualifying child, or

 $12,590 ($14,590 for married filing jointly) if you do not have a qualifying child.

2. You must have a valid social security number.

3. Your filing status cannot be "Married filing separately."

4. You must be a U.S. citizen or resident alien all year.

5. You cannot file Form 2555 or Form 2555-EZ (relating to foreign earned income).

6. Your investment income must be $2,900 or less.

7. You must have earned income.

Chapter 2.
Rules If You Have a Qualifying Child



8. Your child must meet the relationship, age, and residency tests.

9. Your qualifying child cannot be used by more than one person to claim the EIC.

10. You cannot be a qualifying child of another person.

Chapter 3.
Rules If You Do Not Have a Qualifying Child


11. You must be at least age 25 but under age 65.


12. You cannot be the dependent of another person.


13. You cannot be a qualifying child of another person.

14. You must have lived in the United States more than half of the year.

Chapter 4.
Figuring and Claiming the EIC

15. Your earned income must be less than:
 $37,783
($39,783 for married filing jointly) if you have more than one qualifying child,

 $33,241
($35,241 for married filing jointly) if you have one qualifying child, or

 $12,590 ($14,590 for married filing jointly) if you do not have a qualifying child.
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Posted by Dave Thompson (+66) 14 years ago
Wow.. that was a lot of information you provided and it answered a lot of what i was wondering.. thank you


9. Your qualifying child cannot be used by more than one person to claim the EIC.


concerning the above #9... I would like to know if that even though on MY return I claimed all THREE kids for Dependants, there is still one child who may or may not be used for HER return, not as a dependant, but for a qualifying child for EIC on her return... just for EIC...

It's not really a big deal, if we cant, we cant..., but if we can and its a perfectly legal "loophole" to take advantage of, she would like to do it so she wont have to owe any taxes come the 15th of April.

thanks again and I really appreciate the time and effort for your response and post.

Dave

[This message has been edited by Dave Thompson (edited 2/14/2008).]
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Posted by Tammy (+71) 14 years ago
Yes
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Posted by poisonspaghetti (+282) 14 years ago
Dave, I would like to commend you on being the bravest man I know. Not many people would rely on the "experts" on Milescity.com for advice on something as important as their taxes. Good luck with that.
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