| Publication 596 |
2008 Tax Year |
Chapter 2.
Rules If You Have a Qualifying Child
If you have met all the rules in chapter 1, use this chapter to see if you have a qualifying child. This chapter discusses
Rules
8 through 10 . You must meet all three of those rules, in addition to the rules in chapters 1 and 4, to qualify for the earned
income
credit with a qualifying child.
You must file Form 1040 or Form 1040A to claim the EIC with a qualifying child. (You cannot file Form 1040EZ.) You also must
complete
Schedule EIC and attach it to your return. If you meet all the rules in chapter 1 and this chapter, read chapter 4 to find
out what to do
next.
No qualifying child.
If you do not meet Rule 8, you do not have a qualifying child. Read chapter 3 to find out if you can get the earned income credit
without a qualifying child.
Rule 8. Your Child Must Meet the Relationship, Age, and Residency Tests
Your child is a qualifying child if your child meets three tests. The three tests are:
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Relationship,
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Age, and
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Residency.
The three tests are illustrated in Figure 2 on page 13. The paragraphs that follow contain more information about each test.
To be your qualifying child, a child must be your:
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Son, daughter, stepchild, foster child, or a descendant of any of them (for example, your grandchild), or
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Brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them (for example, your niece
or
nephew).
The following definitions clarify the relationship test.
Adopted child.
An adopted child is always treated as your own child. The term “ adopted child” includes a child who was lawfully placed with you for legal
adoption.
Foster child.
For the EIC, a person is your foster child if the child is placed with you by an authorized placement agency or by
judgment, decree, or other order
of any court of competent jurisdiction. (An authorized placement agency includes a state or local government agency. It also
includes a tax-exempt
organization licensed by a state. In addition, it includes an Indian tribal government or an organization authorized by an
Indian tribal government to
place Indian children.)
Example.
Debbie, who is 12 years old, was placed in your care 2 years ago by an authorized agency responsible for placing children
in foster homes. Debbie
is your foster child.
Figure 2. Tests for Qualifying Child
Married child.
If your child was
married at the end of the year, he or she does not meet the relationship test unless either of these two
situations applies to you:
-
You can claim the child's exemption, or
-
The reason you cannot claim the child's exemption is that you gave that right to your child's other parent under the Special rule for
divorced or separated parents, described later.
Your child must be:
-
Under age 19 at the end of 2007,
-
Under age 24 at the end of 2007 and a student, or
-
Permanently and totally disabled at any time during 2007, regardless of age.
The following example and definitions clarify the age test.
Example.
Your son turned 19 on December 10. Unless he was disabled or a student, he is not a qualifying child because, at the end of
the year, he was not
under age 19.
Student defined.
To qualify as a student, your child must be, during some part of each of any 5 calendar months during the calendar
year:
-
A full-time student at a school that has a regular teaching staff, course of study, and regular student body at the school,
or
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A student taking a full-time, on-farm training course given by a school described in (1), or a state, county, or local
government.
The 5 calendar months need not be consecutive.
A full-time student is a student who is enrolled for the number of hours or courses the school considers to be full-time
attendance.
School defined.
A
school can be an elementary school, junior or senior high school, college, university, or technical, trade, or mechanical
school. However, on-the-job training courses, correspondence schools, and schools offering courses only through the Internet
do not count as schools
for the EIC.
Vocational high school students.
Students who work in co-op jobs in private industry as a part of a school's regular course of classroom and practical
training are considered
full-time students.
Permanently and totally disabled.
Your child is permanently and totally disabled if both of the following apply.
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He or she cannot engage in any substantial gainful activity because of a physical or mental condition.
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A doctor determines the condition has lasted or can be expected to last continuously for at least a year or can lead to death.
Your child must have lived with you in the United States for more than half of 2007. The following definitions clarify the
residency test.
United States.
This means the 50 states and the District of Columbia. It does not include Puerto Rico or U.S. possessions such as
Guam.
Homeless shelter.
Your home can be any location where you regularly live. You do not need a traditional home. For example, if your child
lived with you for more than
half the year in one or more homeless shelters, your child meets the residency test.
Military personnel stationed outside the United States.
U.S. military personnel stationed outside the United States on extended active duty are considered to live in the
United States during that duty
period for purposes of the EIC.
Extended active duty.
Extended active duty means you are called or ordered to duty for an indefinite period or for a period of
more than 90 days. Once you begin serving your extended active duty, you are still considered to have been on extended active
duty even if you do not
serve more than 90 days.
Birth or death of child.
A
child who was born or died in 2007 is treated as having lived with you for all of 2007 if your home was
the child's home the entire time he or she was alive in 2007.
Temporary absences.
Count time that you or your child is away from home on a temporary absence due to a special circumstance as time lived
with you. Examples of a
special circumstance include illness, school attendance, business, vacation, military service, and detention in a juvenile
facility.
Kidnapped child.
A kidnapped child is treated as living with you for more than half of the year if the child lived with you for more
than half the part of the year
before the date of the kidnapping. The child must be presumed by law enforcement authorities to have been kidnapped by someone
who is not a member of
your family or the child's family. This treatment applies for all years until the child is returned. However, the last year
this treatment can apply
is the earlier of:
-
The year there is a determination that the child is dead, or
-
The year the child would have reached age 18.
If your qualifying child has been kidnapped and meets these requirements, enter “ KC,” instead of a number, on line 6 of Schedule EIC.
Social security number.
Your qualifying child must have a valid social security number (SSN), unless the child was
born and died in 2007. You cannot claim the EIC on the basis of a qualifying child if:
-
Your qualifying child's SSN is missing from your tax return or is incorrect,
-
Your qualifying child's social security card says “Not valid for employment” and was issued for use in getting a federally funded
benefit, or
-
Instead of an SSN, your qualifying child has:
-
An individual taxpayer identification number (ITIN), which is issued to a noncitizen who cannot get an SSN, or
-
An adoption taxpayer identification number (ATIN), issued to adopting parents who cannot get an SSN for the child being adopted
until the
adoption is final.
If you have two qualifying children and only one has a valid SSN, you can claim the EIC only on the basis of that child. For
more information about
SSNs, see Rule 2.
Rule 9. Your Qualifying Child Cannot Be Used By More Than One Person To Claim the EIC
Sometimes a child meets the rules to be a qualifying child of more than one person. However, only one person can treat that
child as a qualifying
child and claim the EIC using that child. The paragraphs that follow will help you decide who, if anyone, can claim the EIC
when more than one person
has the same qualifying child.
You can choose which person will claim the EIC.
If you and someone else have the same qualifying child, you and the other person(s) can decide which of you, if otherwise
eligible, will take all
of the following tax benefits based on the qualifying child.
-
The child's exemption.
-
The child tax credit.
-
Head of household filing status.
-
The credit for child and dependent care expenses.
-
The exclusion for dependent care benefits.
-
The EIC.
The other person cannot take any of these six tax benefits unless he or she has a different qualifying child.
If you and the other person(s) cannot agree and more than one person claims the EIC or the other tax benefits just
listed using the same child, the
tie-breaker rule (explained in Table 2) applies. However, the tie-breaker rule does not apply if the other person is your
spouse and you file a joint
return.
Table 2. When More Than One Person Files a Return Claiming the Same Qualifying Child (Tie-Breaker Rule) Caution. If a child is treated as the qualifying child of the noncustodial parent under the special rule for divorced or separated
parents described later, see Applying Rule 9 to divorced or separated parents, later.
| IF more than one person files a return claiming the same qualifying child and
.... |
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THEN the child will be treated as the qualifying child of the .... |
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only one of the persons is the child's parent,
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parent.
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two of the persons are parents of the child and they do not file a joint
return together,
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parent with whom the child lived the longest during the year.
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two of the persons are parents of the child, the child lived with each
parent the same amount of time during the year, and the parents do not file a joint return together,
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parent with the higher adjusted gross income (AGI).
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none of the persons are the child's parent,
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person with the highest AGI.
|
If another person claims the EIC using this child.
If your EIC is denied because your qualifying child is treated under this rule as the qualifying child of another
person for 2007, you may be able
to take the EIC using a different qualifying child, but you cannot take the EIC using the rules in chapter 3 for people who
do not have a qualifying
child.
If the other person cannot claim the EIC.
If you and someone else have the same qualifying child but the other person cannot claim the EIC because he or she
is not eligible or his or her
earned income or AGI is too high, you may be able to treat the child as a qualifying child. See Example 5. But also see You can choose
which person will claim the EIC, earlier.
Examples. The following examples may help you in determining whether you can claim the EIC when you and someone else have the same
qualifying child.
Example 1.
You and your 2-year-old son lived with your mother all year. You are 25 years old. Your only income was $9,000 from a part-time
job. Your mother's
only income was $20,000 from her job. Your son is a qualifying child of both you and your mother because he meets the relationship,
age, and residency
tests for both you and your mother. However, only one of you can treat him as a qualifying child to claim the EIC (and, if
that person qualifies, the
other tax benefits listed on page 15). You agree to let your mother claim him. This means, if you do not claim your son as
a qualifying child for the
EIC or any of the other tax benefits listed on page 15, your mother can treat your son as a qualifying child to claim the
EIC (and any other tax
benefit listed on page 15 for which she qualifies).
Example 2.
The facts are the same as in Example 1 except that you and your mother both claim your son as a qualifying child. In this case, you as
the child's parent will be the only one allowed to claim your son as a qualifying child for the EIC and the other tax benefits
listed on page 15. The
IRS will disallow your mother's claim to the EIC and any other tax benefits listed on page 15 unless she has another qualifying
child.
Example 3.
The facts are the same as in Example 1 except that you also have two other young children who are qualifying children of both you and
your mother. Only one of you can claim each child as a qualifying child. However, you and your mother can split the three
qualifying children between
you. For example, you can use one child and your mother can use the other two.
Example 4.
The facts are the same as in Example 1 except that you are only 18 years old. This means you are a qualifying child of your mother.
Because of Rule 10, discussed next, you cannot claim the EIC. Only your mother may be able to treat your son as a qualifying child to claim
the EIC. If your mother meets all the other requirements for claiming the EIC and you do not claim your son as a qualifying
child for any of the other
tax benefits listed on page 15, your mother can treat both you and your son as qualifying children for the EIC.
Example 5.
The facts are the same as in Example 1 except that your mother earned $50,000 from her job. Because your mother's earned income is too
high for her to claim the EIC, only you can claim the EIC using your son.
Example 6.
You, your husband, and your 10-year-old son lived together until August 1, 2007, when your husband moved out of the household.
In August and
September, your son lived with you. For the rest of the year, your son lived with your husband. Your son is a qualifying child
of both you and your
husband because your son lived with each of you for more than half the year and because he met the relationship and age tests
for both of you. At the
end of the year, you and your husband still were not divorced, legally separated, or separated under a written separation
agreement, so the special
rule for divorced or separated parents does not apply.
You and your husband will file separate returns. Your husband agrees to let you treat your son as a qualifying child. This
means, if your husband
does not claim your son as a qualifying child for any of the tax benefits listed on page 15, you can claim him as a qualifying
child for any tax
benefit listed on page 15 for which you qualify. However, you cannot claim head of household filing status because you and
your husband did not live
apart the last 6 months of the year. As a result, your filing status is married filing separately, so you cannot claim the
EIC or the credit for child
and dependent care expenses. See Rule 3.
Example 7.
The facts are the same as in Example 6 except that you and your husband both claim your son as a qualifying child. In this case, only
your husband will be allowed to treat your son as a qualifying child. This is because, during 2007, the boy lived with him
longer than with you. You
cannot claim the EIC for persons either with or without a qualifying child. However, because you and your husband did not
live apart the last 6 months
of the year, your husband cannot claim head of household filing status. As a result, his filing status is married filing separately,
so he cannot
claim the EIC or the credit for child and dependent care expenses. See Rule 3.
Example 8.
You, your 5-year-old son, and your son's father lived together all year. You and your son's father are not married. Your son
is a qualifying child
of both you and his father because he meets the relationship, age, and residency tests for both you and his father. You earned
$12,000 and your son's
father earned $14,000. Neither of you had any other income. Your son's father agrees to let you treat the child as a qualifying
child. This means, if
your son's father does not claim your son as a qualifying child for the EIC or any of the other tax benefits listed on page
15, you can claim him as a
qualifying child for the EIC and any other tax benefit listed on page 15 for which you qualify.
Example 9.
The facts are the same as in Example 8 except that you and your son's father both claim your son as a qualifying child. In this case,
only your son's father will be allowed to treat your son as a qualifying child. This is because his AGI, $14,000, is more
than your AGI, $12,000. You
cannot claim the EIC for persons either with or without a qualifying child.
Example 10.
You and your 7-year-old niece, your sister's child, lived with your mother all year. You are 25 years old, and your only income
was $9,300 from a
part-time job. Your mother's only income was $15,000 from her job. Your niece is a qualifying child of both you and your mother
because she meets the
relationship, age, and residency tests for both you and your mother. However, only one of you can treat her as a qualifying
child. Your mother agrees
to let you treat the child as a qualifying child. This means, if your mother does not claim her as a qualifying child for
the EIC or any of the other
tax benefits listed on page 15, you can claim your niece as a qualifying child for the EIC and any other tax benefit listed
on page 15 for which you
qualify.
Example 11.
The facts are the same as in Example 10 except that you and your mother both claim your niece as a qualifying child. In this case, only
your mother will be allowed to treat your niece as a qualifying child. This is because your mother's AGI, $15,000, is more
than your AGI, $9,300.
Special rule for divorced or separated parents.
A child will be treated as the qualifying child of his or her noncustodial parent (for purposes of claiming an exemption,
but not for the EIC) if
all of the following apply.
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The parents:
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Are divorced or legally separated under a decree of divorce or separate maintenance,
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Are separated under a written separation agreement, or
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Lived apart at all times during the last 6 months of 2007.
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The child received over half of his or her support for the year from the parents.
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The child is in the custody of one or both parents for more than half of 2007.
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Either of the following statements is true.
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The custodial parent signs Form 8332 or a substantially similar statement that he or she will not claim the child as a dependent
for the
year, and the noncustodial parent attaches the form or statement to his or her return. If the divorce decree or separation
agreement went into effect
after 1984, the noncustodial parent can attach certain pages from the decree or agreement instead of Form 8332.
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A pre-1985 decree of divorce or separate maintenance or written separation agreement that applies to 2007 provides that the
noncustodial
parent can claim the child as a dependent, and the noncustodial parent provides at least $600 for support of the child during
2007.
For details, see Pub. 501. Also see Applying Rule 9 to divorced or separated parents, next.
Applying Rule 9 to divorced or separated parents.
If a child is treated as the qualifying child of the noncustodial parent under the special rule for children of divorced
or separated parents just
described, only the noncustodial parent can claim an exemption and the child tax credit for the child. However, the noncustodial
parent cannot claim
the child as a qualifying child for the other tax benefits listed on page 15. Only the custodial parent or other eligible
taxpayer can claim the child
as a qualifying child for those tax benefits. However, if the custodial parent and another eligible taxpayer both file a return
claiming the child as
a qualifying child for any of these four tax benefits, the IRS will disallow all but one of the claims using the tie-breaker
rule in Table 2.
Example 1.
You and your 5-year-old son lived all year with your mother, who paid the entire cost of keeping up the home. Under the rules
for children of
divorced or separated parents, your son is treated as the qualifying child of his father, who can claim an exemption and the
child tax credit for the
child if he meets all the requirements to do so. Because of this, you cannot claim an exemption or the child tax credit for
your son. However, your
son's father cannot claim your son as a qualifying child for head of household filing status, the credit for child and dependent
care expenses, the
exclusion for dependent care benefits, or the EIC. You and your mother did not have any child care expenses or dependent care
benefits, but the boy is
a qualifying child of both you and your mother for the EIC and head of household filing status because he meets the relationship,
age, residency, and
support tests for both you and your mother. (Note: The support test does not apply for the EIC.) However, you agree to let
your mother claim your son.
This means she can claim him for the EIC and head of household filing status if she qualifies for each and if you do not claim
him as a qualifying
child for the EIC. (You cannot claim head of household filing status because your mother paid the entire cost of keeping up
the home.)
Example 2.
The facts are the same as in Example 1 except that you and your mother both claim your son as a qualifying child for the EIC. Your
mother also claims him as a qualifying child for head of household filing status. You as the child's parent will be the only
one allowed to claim your
son as a qualifying child for the EIC. The IRS will disallow your mother's claim to the EIC and head of household filing status
unless she has another
qualifying child.
Rule 10. You Cannot Be a Qualifying Child of Another Person
You are a qualifying child of another person (your parent, guardian, foster parent, etc.) if all of the
following statements are true.
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You are that person's son, daughter, stepchild, grandchild, or foster child.
Or, you are that person's brother, sister, half brother, half sister, stepbrother, or stepsister (or the child
or grandchild of that person's brother, sister, half brother, half sister, stepbrother, or stepsister).
-
At the end of the year you were under age 19, or under age 24 and a student, or any age if you were permanently and totally
disabled at any
time during the year.
-
You lived with that person in the United States for more than half of the year.
For more details about the tests to be a qualifying child, see Rule 8.
If you (or your spouse, if filing a joint return) are a qualifying child of another person, you cannot claim the EIC. This
is true even if the
person for whom you are a qualifying child does not claim the EIC or meet all of the rules to claim the EIC. Put “No” beside line 66a (Form 1040)
or line 40a (Form 1040A).
Example.
You and your daughter lived with your mother all year. You are 22 years old and attended a trade school full time. You had
a part-time job and
earned $5,700. You had no other income. Because you meet the relationship, age, and residency tests, you are a qualifying
child of your mother. She
can claim the EIC if she meets all the other requirements. Because you are your mother's qualifying child, you cannot claim
the EIC. This is so even
if your mother cannot or does not claim the EIC.
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