Rules for Claiming the Earned Income Credit with a Qualifying Child

The Earned Income Credit (EIC) is a tax credit designed to provide financial assistance to low-income individuals and families. To qualify for the EIC, you must meet certain criteria, including having a qualifying child. In this article, we will discuss the rules for claiming the EIC with a qualifying child.

Qualifying Child Criteria

To be considered a qualifying child for the EIC, the child must meet the following criteria:

1. Relationship: The child must be your son, daughter, stepchild, foster child, sibling, half-sibling, step-sibling, or a descendant of any of them.
2. Age: The child must be under the age of 19 at the end of the tax year, or under the age of 24 if they are a full-time student. Alternatively, the child can be any age if they are permanently and totally disabled.
3. Residency: The child must have lived with you in the United States for more than half of the tax year.
4. Joint Return: The child cannot file a joint return for the tax year, unless they are filing jointly only to claim a refund of income tax withheld or estimated tax paid.

Tiebreaker Rules

In some cases, a child may meet the criteria to be a qualifying child for more than one person. In such situations, the tiebreaker rules determine who can claim the child as a qualifying child for the EIC. The tiebreaker rules are as follows:

1. If only one person is the child's parent, that person can claim the child as a qualifying child.
2. If the parents are married and file a joint return, they can claim the child as a qualifying child.
3. If the parents are not married and do not file a joint return, but both parents claim the child as a qualifying child, the IRS will treat the child as the qualifying child of the parent with whom the child lived for the longer period during the tax year. If the child lived with each parent for an equal amount of time, the IRS will treat the child as the qualifying child of the parent with the higher adjusted gross income (AGI).
4. If no parent can claim the child as a qualifying child, the child is treated as the qualifying child of the person with the highest AGI.

Special Rule for Divorced or Separated Parents

In cases where the parents are divorced, legally separated, or live apart, a special rule applies. The child will be treated as the qualifying child of the noncustodial parent if the following conditions are met:

1. The parents are divorced or legally separated under a decree of divorce or separate maintenance, or they are separated under a written separation agreement, or they lived apart for the last 6 months of the tax year.
2. The child received over half of their support from the parents.
3. The child is in the custody of one or both parents for more than half of the tax year.
4. Either the custodial parent signs Form 8332 or a similar statement indicating that they will not claim the child as a dependent, and the noncustodial parent attaches the form or statement to their tax return. Alternatively, a pre-1985 decree of divorce or separate maintenance or a written separation agreement can allow the noncustodial parent to claim the child as a dependent if they provide at least $600 for the child's support during the tax year.

Conclusion

Claiming the Earned Income Credit with a qualifying child requires meeting specific criteria regarding the child's relationship, age, residency, and joint return status. In cases where multiple individuals may qualify to claim the child, tiebreaker rules determine who can claim the child as a qualifying child. Additionally, a special rule applies to divorced or separated parents. Understanding these rules will help ensure that you can claim the EIC with a qualifying child accurately.