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EIC

gwtxcpa
Level 1

Single parent has $6,500 in earned income & no unearned income & receives SSA. Qualifying child has $16,500 in unearned income & no earned income. Child receives SSA due to prior years death of father. Does single parent receive EIC for child. Child is 5 years old. Single parent lives in home with grandparents.

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7 Replies 7
sjrcpa
Level 15

Go through the worksheets and 8867 and see.


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TaxGuyBill
Level 14

Nothing in your post seems to disqualify it.  Is there anything in particular that you think could disqualify it?

The only think I see is if the grandparents were to claim the child instead of the mom.  That would disqualify EIC for the mom.  Otherwise, I don't see anything in your post that would disqualify it.

qbteachmt
Level 15

Did you see what the IRS calculator tells you:

https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/use-the-eitc-assistant

 

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gwtxcpa
Level 1

My concern was would the service wonder/challenge the child's support by parent given the parent's diminished income in relation to the child's unearned income. Unearned income for child was generated by  father's life insurance proceeds.

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TaxGuyBill
Level 14

@gwtxcpa wrote:

My concern was would the service wonder/challenge the child's support by parent 


Support does not matter at all.  In fact, even if the child provided over 1/2 of his own support (which would disqualify him from being a dependent), the parent could still claim EIC because EIC specially says that support does not matter.

However, if much of the child's money was used for support, you may want to fill out the Support Worksheet to see if the parent is eligible to claim the child as a dependent.  But as I mentioned above, that would not affect EIC.

https://apps.irs.gov/app/vita/content/globalmedia/teacher/worksheet_for_determining_support_4012.pdf

qbteachmt
Level 15

Did you run through the Helper tool?

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gwtxcpa
Level 1

Yes, I did the helper tool several times. Each time it gave me an EIC of $1,777. My problem is with the child's unearned income being so high. I just hope that I am not missing something in that regard.

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