Ask the taxgirl: EIC Requirements for Qualifying Child

Taxpayer asks:

my son gets ssi payments he has autisim, adhd, and asburgers disorder he is 19 years old now can he still get earned income the h&r block said he dont get it anymore let me know

Taxgirl says:

To claim the EIC you must meet certain income and filing criteria. In addition, if you claim EIC with a qualifying child, your child must meet three tests. The three tests are:

  1. Relationship;
  2. Age; and
  3. Residency.

To meet the first test, the Relationship Test, a child must be your: natural child, legally adopted child, stepchild, foster child, or descendant of any of them (such as your grandchild) or the sibling, half sibling, step sibling, or descendant of any of them (for example, your niece or nephew).

To meet the second test, the Age Test, your child must be: under age 19 at the end of 2008, under age 24 at the end of 2008 and a student, or permanently and totally disabled at any time during 2008, regardless of age.

To meet the third test, the Residency Test, your child must have lived with you in the United States for more than half of 2008.

Assuming that you meet the other income and filing criteria, the problem likely does stem from your son’s age. I’m guessing, from your question, that your child turned 19 in 2008 as opposed to in 2009. If that is the case, he wouldn’t qualify under the Age Test.

This sounds a situation where some tax planning would benefit you. I would strongly suggest that you contact a tax professional who can look at your overall situation and make some recommendations as to the best plan moving forward. Good luck!

Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation.

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Comments

  1. Tommy in Ny

    If the taxpayers child is totally and permanently disabled, which autism may qualify, then the age test is met.

  2. Author
    Kelly

    Right, so long as the child qualifies. However, the test for “totally and permanently disabled” is not insignificant. A diagnosis of autism, on its own, is not enough to qualify. Functioning autistics may be able to participate in “substantial gainful activity” – that threshold is one of two tests to meet the “totally and permanently disabled” criteria. This is why I strongly suggest that the taxpayer seek out professional advice.

  3. Jill Martin

    The questioner said her child gets SSI, which has its own totally and permanently disabled requirement.

  4. Author
    Kelly

    Jill,

    The IRS is not required to follow the SSA’s determination for this purpose – in fact, the SSA may allow SSI even if you are employed. I have seen many a return for folks who received SSI or other disability benefits but were not considered disabled for tax purposes. Much like how you can be a resident for purposes of immigration but not taxation, each agency has its own criteria. Again, this is why I strongly urge seeking out professional advice in this matter.

  5. Bill

    In order to claim a child as a dependent there are 4 elements. The one misses in the above discussion is the support test. Assuming SSI is to the child under 19 or over 19 and sutdent less than 24, the question is does all of the ssi consider going to the support of the child. For low income families, the ssi may approach the income of the parent. If the total ssi is consider to go to the support of the child, then the parent could not claim the child as a dependent, eliminating child tax credit, additional child tax credit and EIC.

  6. Bill

    One additional comment, the child tax credit if only for children under the age of 17 at the end of tax year.

  7. Carlala

    Bill….the support test is not a criterion of EIC, correct? I understood that a child does not have to be your dependent to claim EIC as long as all the other tests are met.

  8. Bill

    Carlala, Support is not a criterion for EIC.–However support is a element in determining dependancy. I believe,perhaps incorrectly, that a dependent is required in obtaining the greater benefit of EIC. An example is the child receives $7500 in welfare payments and a single parent earns $13000. The parent rents and there is no other income. Does the child qualify as a dependent of the taxpayer? It is my belief that the support test may not be met. I am acutely aware that this would be unfair and probably not what is intended in the rules for dependancy and EIC. The due deligance requirement for preparers is tough.

  9. Carlalala

    Hello, Bill!
    This is my understanding of the tax law…if I am way off base…please set me straight!
    At the very least:
    Your above single parent taxpayer making $13,000 with one child will recv $3,043.00 in Earned Income Credit. With $7,500 coming from the government in the child’s name, that child is most likely NOT the dependent of the taxpayer…but, in this case it doesn’t matter for EIC purposes; the child does NOT have to be a dependent in order for the taxpayer to get $3,043! Also, if the taxpayer can not support the Head Of Household Status, that’s ok,,,,The taxpayer would STILL get the $3,043 EIC when filing Single! As long as the the child meets the 3 tests that are outlined in the original post (Relationship, Residency and Age) the taxpayer is in for $3,043 EIC. Nice money, if you can get it!

    As far as the lady with the autistic son…if it really is true that the IRS does not considered her son permanently & totally disable to qualify him as a Qualified Child (and I would get a second and third opinion on this to make sure it IS true)….he might still qualify as a Qualified RELATIVE for a dependency exemption on her return. If the son earned less than $3,650 and lived with her all year, and her earnings provided more than half of his support…well, that’s a little something (if she can use it to offset tax liability). If he earned more than $3650.00 but the income came from working in a qualified shelter/workshop…she may still be able to claim her son as a Qualified Relative if she needs it.

  10. Bill White

    Hi Caralalala, Thanks so much for your response However below is what I have been working with for a “qualifying child” which I believe is required for child tax credit and the benefit for EIC with a qualifying child. The $3043 EIC is with a qualifying child and dependent. No way could I obtain this tax credit indicated in your response without using the child as a dependent. (I use Drake software). The definition below states that for child tax credit the child also must be your dependent. But the EIC requirements also address the qualifyi ng child.(I am not addressing the EIC for low income single taxpayer with no dependents which is limitecd to less than $500). I must be thick headed but I can reproduce your results on my computer with the program I use. The work sheet ask certain question and I answer them and the program tell me that the taxpayer do not qualify to the EIC.

    IRS Resources
    Definition of Qualifying child
    For 2009, the following changes have been made to the definition of a qualifying child.

    To be your qualifying child, the child must be younger than you (or your spouse if filing jointly).
    A child cannot be your qualifying child if he or she files a joint return, unless the return was filed only as a claim for refund.
    If the parents of a child can claim the child as a qualifying child but no parent so claims the child, no one else can claim the child as a qualifying child unless that person’s AGI is higher than the highest AGI of any parent of the child.
    Your child is a qualifying child for purposes of the child tax credit only if you can and do claim an exemption for him or her.

    I appreciate your response and wish I understood.

    Thanks, BIll

  11. Carlalala

    Tax law is confusing enough…tax software can sometimes lead you astray…and if you call the IRS you’ll only get someone reading out of the Pub 17 which created the confusion in the first place!
    Keep this in mind…..every tax situation is going to be different when it comes to determining the Child Tax Credit, the Additional Child Tax Credit and the EIC. Income, Relationship, Who else is in the household, Support, Age….it all plays in and you have to be able to interpret this into your tax program for it to grant you claimable credits. I am unfamiliar with Drake, but let me give you an examples that will shed some light on why I am confident that a taxpayer does not have to claim their child as a dependent to claim Earning Income credit:
    These are based on real clients that came through our office.

    #1. Mary and John were legally divorced in 2005. They have one son, Billy(age 7).
    Billy lives with Mary all year and she is the custodial parent. Apart from child support from John, Mary receives no other assistance to support Billy other than her own wages. According to their divorce papers Mary is able to claim Billy as a dependent in the “even” years (2006, 2008, 2010…) and John claims Billy as a dependent in the “odd” years (2007, 2009, 2011). The IRS allows this under the Special Rule for Children of Divorced or Separated Parents (John must attach a form 8332 or send in a copy of the divorce settlement).
    John earned $25,000 a year and Mary earns $18,000.

    John’s status is still Single (he can not claim Head of Household because Billy fails the residency test.) John, now, can claim one dependent which will allow him to take the Child Tax credit. Even though John now has Billy on his tax return as a dependent he can NOT claim EIC because he , once again, fails the residency test (Billy was NOT in his household more than 6 months).

    Mary claims Head of Household (she will indicate in her tax program that she has a qualifying child for this purpose even though she relinquished the dependency exemption through the rule above.) Even though she can not claim Billy as a dependent and can not claim the Child Tax Credit….she ABSOLUTELY can claim the EIC credit for $2,795.00

    #2. Charlene lived with her 3 sons (ages 4,7,10) all year. Charlene worked as a home health aid until she fell down and broke her wrist in March of 2009. Her earnings as a home health aid that year were only $4,000. She collected Worker’s Comp (non taxable/non reportable as income.) She also qualified for public assistance and recvd gifted money from relatives to support her household. She estimates that the cost of running her household is $20,000/per year.
    Charlene’s income does NOT qualify her as Head of Household. Charlene did NOT support her 3 children on her earnings (the children are considered as ‘supporting themselves’ through family gifts and public assistance). Therefore she will file SINGLE with NO Dependents. BUT>>>>>she absolutely qualifies for EIC because EIC has only THREE tests (Support is NOT one of them):
    1. Relationship: yes, they are her 3 sons by birth
    2. Residency: yes, they still lived with her over 6 months
    3. Age: yes, ages 4-7-10
    Guess what? Charlene is due $1,789.00 in EIC alone!
    Here’s the trick…you need to be able to put all the “yes’s” and “no’s” in the correct place in your program so it doesn’t block you from getting credits you want or claim things (like dependency) that you don’t want!

    Whew…..the IRS will actually figure out the EIC for you if you contact them…See Publication 596 for more information.

  12. Bill White

    Hi Carlalala, Thanks for the input. I still have a problem with the example I addressed . The child provided more than half of his support. All of the other requirements for a “qualifying child” were met except the support test. This I assume would prevent the child from meeting the requirements as a “qualifying child”. I do appreciate your examples. I like your examples and explaination much better than what I came up with. I will look at my program and publications again. I really appreciate your response.

  13. Carlalala

    Here is what is throwing you off: There is no ONE definition of “Qualified Child”.
    A taxpayer should NOT ask themselves.”Do I have a Qualified Child?” they must ask themselves: “Do I have a Qualifying Child to claim a dependent exemption?”…”Do I have a Qualifying Child for the Child Tax Credit?”…”Do I have a Qualifying Child for the Earned Income Credit?” etc etc…Each of the tests are different to determine “Qualifying Child”.

    And each and every taxpayer’s situation is different. Sometimes their child is a Qualifying Child For Everything…Sometimes only a few things….sometimes JUST for one thing…sometimes nothing.

    In your example with the mother and son w/ $7500. You are applying the correct tests to determine that this child does NOT pass as a Qualified Child for Claim of Exemption for a Dependent
    nor does he pass the test for as a Qualified Child for
    Child Tax Credit.
    But you are NOT applying the correct test when determining if this child is a Qualified Child for the EIC.
    ———————————————————————————————–
    So ask yourself again:
    Is this a Qualifying Child for the purpose of The Earned Income Credit?
    See Publication 596/Chapter 2/Tests For a Qualifying Child for EIC.
    (Remember this is specific to your single mother scenario…other factors would come into play if we were talking about other households with other circumstances.)
    1.Must be your son…YES!
    2.Must be under age 19(or 24 if in college)….YES!
    3, Your son will NOT be filing a joint return…YES!
    4. Your son lived with you in the US for more than half the year…YES!
    THAT’S IT! She has a Qualified Child for the purpose of EIC. As long as the mother meets the other tests for HERSELF for EIC she is IN! Notice how there are NO SUPPORT Questions or NO REQUIREMENTS that the taxpayer be able to claim the child as a dependent.
    IF you need further proof that a child does NOT have to be claimed as a dependent in order for the taxpayer to receive just the EIC…do this:
    1. Go to irs.gov
    2. Look on the left under ‘IRS Resources’ and click on ‘Frequently Asked Questions’
    3. Look under ‘Frequently Asked Questions CATAGORIES and click on #7. Earned Income Credit.
    4. There is your question!
    “Must I be entitled to claim a child as a dependent to claim the earned income credit based on the child being my qualified child?”
    ANSWER: 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.
    Ta-Da!
    Your challenge is to make that work in your computer program. Make sure you understand each and every question before you answer Yes or NO. Most people would say “Screw It” and just take the dependency exemption/Child Tax Credit/and EIC because they get frustrated with a program that seems to be guiding them to take all or nothing. Don’t take a chance that the IRS will call you on it ; you don’t want that mom having to pay back part of her refund + penalty and interest if she gets caught taking an exemption and a credit she shouldn’t. BUT she needs to get the EIC that is coming to her. You bought a program…do they offer tax support or technical support? Call them and ask. Or, you can always contact the IRS and ask how you can have THEM determine your EIC credit. The IRS says they will do this for FREE if you contact them.
    Good Luck…and get that EIC.

  14. Bill White

    Hi Carlalala, Thanks again. After your previous post I went to the tax program again and indeed by using the appropriate yes and no’s and a appropriately answering other questions as you suggested , the program did indeed provide EIC for the taxpayer without claiming the child for an exemption. I appreciate your effort. It still will be difficult to tell a clients with children with the parent of the client(at no cost to them) that they do not qualify as HOH, etc.
    Thanks again,
    Bill

  15. Carlalala

    There are worksheets that the IRS provides (and perhaps your program does too) that can justify your determination.
    Here is what you do:
    Go to Publication 501/ Page 20. Worksheet For Determining Support.
    Make certain the $7500.00 is really in the child’s name.
    If so, ask how much of the money was actually spent.
    ——————————————————————————————
    (*Here’s an interesting aside: I had a client whose son get SSI because his father died. The son gets $6000.00/per year in his name BUT the client (his mom) puts half of that away in a bank account under that child’s name every year….that means that ONLY $3000.00 per year is used by the child to support himself which means that his parent (making 14,000) can easily prove that the child does not support himself more than half!)
    ———————————————————————————————
    Back to the worksheet in Pub, 501:
    You can download this sheet on irs.gov.
    You can go line by line with the client showing them how to determine Support. It is important to show the client WHAT the IRS considers support. If the mom spent the son’s $7500.00 then mom must come up with at least $7501.00 in support from her OWN monies according to that worksheet to claim a dependent (and that worksheet is very specific as to WHAT expenses are considered support).If, by chance….she CAN…then it would be OK to file her status as SINGLE with one DEPENDENT…that would open her up for the Child Tax Credit and the Additional Child Tax Credit. AND GUESS WHAT? If she can file Single with one dependent she doesn’t NEED Head Of Household Status! Why?
    13,000.00- 5,700.00 (Standard Deduction for Single) – $3650.00 (Her exemption) -$3650.00 (Her dependent’s exemption) = 0
    That means She has already zeroed out her tax liability with a Single Status with one dependent. Filing Head Of Household in this case would be OVERKILL…. there is nothing more to GAIN with the HH status and the client is just opening themselves up for compliance problems with the IRS unnecessarily. Clients fixate on getting that Head Of Household Status because their cousin, best friend, baby-daddy… got it and they feel they have to have it too!
    ____________________________________________________
    Now, I’m using my calculator here, so the following are approximations…but the way I figure it….)
    As it stands by filing Single with NO dependents she is still in a decent place:
    13000-5,700 (Standard Deduction Single) -3650 (Personal Exemption)= 3650 taxable income; so she will have a small tax liability($363). Her tax liability is still going to be covered by claiming the EIC AND she is also going to get the $400 Making Work Pay Credit AND she will get all of the federal income tax she may have withheld (box 2 on the W-2) .
    So, at the very least
    $3.043 EIC Credit + 400.00 Making Work Pay Credit= $3443(refundable credits)-363(tax liability) = $3080 REFUND! (plus, if she did withhold any federal tax in box 2 you would add that for even more!) Pretty Nice Refund!
    Now…if she COULD claim a dependent she would add another $1,000 to that but realistically…SHE CAN’T.
    I mean sheesh…and by the looks of it…you’re doing her refund for FREE…so, what’s the problem!? ;-)

  16. Katiek451

    I read all of this with interest. I was wondering what the thought are on this situation. My son is a 22 year old college student at a school 100 miles from my home he stays in my home during college breaks and is on my health and car insurance.
    I meet all the requirements for EIC. But cannnot claim his as a dependent as I don’t meet the support test.
    Can I claim him for EIC if he claims himself on his own return. Thanks for any help. Kate

  17. Carlalala

    You only have to pass 4 test to claim your son as a Qualified Child for EIC purposes:
    1. Relationship: He is your Son. PASS
    2. Age. Under age 24 at the end of 2009, a student (the IRS has a definition of full time-STUDENT on page 245 Pub 17., if your son id a full time student in an accredited college…most likely he passes)…also, he must be younger than you (I’m guessing he is!) PASS
    3. Joint Return. He’s not married, right? If not…you’re good…if so; there are some other rules. PASS.
    4. Residency. Lived with you in the US more than half of 2009. As long as your son considers your home his main residence when he is not at school then you PASS this test. PASS.
    The fact that he will claim himself for an exemption should not preclude you from taking EIC. You just need to make sure you work your tax program not to inadvertently take him as a dependent as well.

  18. Carlalala

    To clarify: If your son’s main residence is your residence when he is not away at school then his time at school is considered a “Temporary Absence” For example if your son was at school from Jan-May…then home with you for the summer…then back at school September-December…then back by Christmas vacation…then this would be an example of a qualified child living with you all 12 months of the year!

  19. Katiek451

    Thank you Carlalala
    Yes all that is true. I did call the IRS – wow it is just like you said someone just asking question that I could look up myself. In the end I was told he would not qualify because I could not claim him as a dependent because of the support test.

    I said I didn’t think support was part of the EIC and was told that the “qualifying child” is for all the credits whether or not it specifcally says that.

    thanks for your help.

  20. Carlalala

    wow…i would STILL get a second opinion on that! I mean it…I have called the IRS on unrelated issues and gotten 2 entirely different answers ~~~so, don’t always go by what they say.
    It sounds like the agent was going by the TIE-BREAKER rules….but you do not sound like you are in a TIE-BREAKER situation so the dependency exemption rule should not apply to you!
    The tie-breaker rules come in to play if there was some OTHER person who could also lay claim to your son (his father, or grandparent for example). It is a way for the IRS to decide who has the more valid claim between two parties….but if NO ONE ELSE has a claim to him then it should not matter that you are not claiming him as a dependent to get EIC. If there is a rule that is excluding you because your son is claiming an exemption for himself…then I can’t find it. Seriously, call the IRS again (or, better yet visit an IRS agent at your nearest federal Building….or contact VITA…or consult with an H&R Block preparer (ask for an EXPERIENCED preparer expert in EIC…they will consult with you for free and only charge you if you go forward with filing a return)…..BUT…really….get a SECOND or THIRD opinion! ) Depending on your income…you could be loosing thousands of dollars by being given the wrong info!
    Keep me posted!

  21. Katiek451

    Thanks I will let you know what I find out and what I decide to do.

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  23. Chamain

    My mom provides about 90% of the suppport for my disabled sister. My sister does have a job but only makes about $2000 per year, and she lives in a house provided by my mother. The tax accountants we use says that my sister cannot be a qualifying child or relative since she does not live with my mother. My interpretation of Pub 501 is that my mother can claim my sister as a dependent even though she doesn’t live with her because she qualifies as a qualifying relative. Am I right or wrong?

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