EIC- Low Income mom and 22 year old daughter working and going to school FT

[10409000]

Good morning, so I believe i know the answer but wanted to get your stamp of approval or advice or info. So Im waiting for my client to respond to my question of "support" she just emailed me tax documents so im reviewing everything closely as this involves EIC and I am super cautious about EIC due to the huge penalties.  So the taxpayer W2 income is 21,000 and her daughter attends college Full Time and also worked and made 13,000 she attended community college and financial aid gave her 11,128 in box 5 of the 1098T and tuition in box 1 is zero. 

So, my first thought is the daughter made 13,000 working and 11,128 of financial aid bringing her number to 24,128 and then I look at her mom's income of 21,000. My first thought is the daughter made more so I'm "assuming" she doesn't qualify to be her mom's dependent due to her income being more than her mom.  So with the numbers i just listed is it even ok to bring up the question of did this person provide more than 50% of her own support? What if the mom says "Yes" I supported her more than 51% I still don't feel right giving EIC because of the income listed on W2 and 1098T. 

[rbynaker · Accepted solution]

Income does not necessarily equal expenses.  Maybe Mom spent $50,000 from savings to pay for the daughter's tuition, living expenses, new car, etc.  Maybe the daughter put all of her earned income into a savings account and didn't spend any of it.  You have to ask because you can't assume when it comes to due diligence.

Pub 501 has a support worksheet on page 16:

https://www.irs.gov/pub/irs-pdf/p501.pdf

Rick