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Tax debt help 31. Tax debt help   Tax on Unearned Income of Certain Children Table of Contents What's New Introduction Useful Items - You may want to see: Which Parent's Return To UseParents Who Do Not File a Joint Return Parent's Election To Report Child's Interest and DividendsEffect of Making the Election Figuring Child's Income Figuring Additional Tax Tax for Certain Children Who Have Unearned IncomeProviding Parental Information (Form 8615, lines A–C) Step 1. Tax debt help Figuring the Child's Net Unearned Income (Form 8615, Part I) Step 2. Tax debt help Figuring Tentative Tax at the Parent's Tax Rate (Form 8615, Part II) Step 3. Tax debt help Figuring the Child's Tax (Form 8615, Part III) What's New Net Investment Income Tax. Tax debt help . Tax debt help  For tax years beginning after December 31, 2012, a child whose tax is figured on Form 8615 may be subject to the Net Investment Income Tax (NIIT). Tax debt help NIIT is a 3. Tax debt help 8% tax on the lesser of the net investment income or the excess of the child's modified adjusted gross income (MAGI) over the threshold amount. Tax debt help Use Form 8960, Net Investment Income Tax, to figure this tax. Tax debt help For more information on NIIT, go to www. Tax debt help irs. Tax debt help gov and enter “Net Investment Income Tax” in the search box. Tax debt help Introduction This chapter discusses the following two rules that may affect the tax on unearned income of certain children. Tax debt help If the child's interest and dividend income (including capital gain distributions) total less than $10,000, the child's parent may be able to choose to include that income on the parent's return rather than file a return for the child. Tax debt help (See Parent's Election To Report Child's Interest and Dividends , later. Tax debt help ) If the child's interest, dividends, and other unearned income total more than $2,000, part of that income may be taxed at the parent's tax rate instead of the child's tax rate. Tax debt help (See Tax for Certain Children Who Have Unearned Income , later. Tax debt help ) For these rules, the term “child” includes a legally adopted child and a stepchild. Tax debt help These rules apply whether or not the child is a dependent. Tax debt help Useful Items - You may want to see: Publication 929 Tax Rules for Children and Dependents Form (and Instructions) 8615 Tax for Certain Children Who Have Unearned Income 8814 Parents' Election To Report Child's Interest and Dividends Which Parent's Return To Use If a child's parents are married to each other and file a joint return, use the joint return to figure the tax on the child's unearned income. Tax debt help The tax rate and other return information from that return are used to figure the child's tax as explained later under Tax for Certain Children Who Have Unearned Income . Tax debt help Parents Who Do Not File a Joint Return For parents who do not file a joint return, the following discussions explain which parent's tax return must be used to figure the tax. Tax debt help Only the parent whose tax return is used can make the election described under Parent's Election To Report Child's Interest and Dividends . Tax debt help Parents are married. Tax debt help   If the child's parents file separate returns, use the return of the parent with the greater taxable income. Tax debt help Parents not living together. Tax debt help   If the child's parents are married to each other but not living together, and the parent with whom the child lives (the custodial parent) is considered unmarried, use the return of the custodial parent. Tax debt help If the custodial parent is not considered unmarried, use the return of the parent with the greater taxable income. Tax debt help   For an explanation of when a married person living apart from his or her spouse is considered unmarried, see Head of Household in chapter 2. Tax debt help Parents are divorced. Tax debt help   If the child's parents are divorced or legally separated, and the parent who had custody of the child for the greater part of the year (the custodial parent) has not remarried, use the return of the custodial parent. Tax debt help Custodial parent remarried. Tax debt help   If the custodial parent has remarried, the stepparent (rather than the noncustodial parent) is treated as the child's other parent. Tax debt help Therefore, if the custodial parent and the stepparent file a joint return, use that joint return. Tax debt help Do not use the return of the noncustodial parent. Tax debt help   If the custodial parent and the stepparent are married, but file separate returns, use the return of the one with the greater taxable income. Tax debt help If the custodial parent and the stepparent are married but not living together, the earlier discussion under Parents not living together applies. Tax debt help Parents never married. Tax debt help   If a child's parents have never been married to each other, but lived together all year, use the return of the parent with the greater taxable income. Tax debt help If the parents did not live together all year, the rules explained earlier under Parents are divorced apply. Tax debt help Widowed parent remarried. Tax debt help   If a widow or widower remarries, the new spouse is treated as the child's other parent. Tax debt help The rules explained earlier under Custodial parent remarried apply. Tax debt help Parent's Election To Report Child's Interest and Dividends You may be able to elect to include your child's interest and dividend income (including capital gain distributions) on your tax return. Tax debt help If you do, your child will not have to file a return. Tax debt help You can make this election only if all the following conditions are met. Tax debt help Your child was under age 19 (or under age 24 if a full-time student) at the end of the year. Tax debt help Your child had income only from interest and dividends (including capital gain distributions and Alaska Permanent Fund dividends). Tax debt help The child's gross income was less than $10,000. Tax debt help The child is required to file a return unless you make this election. Tax debt help The child does not file a joint return for the year. Tax debt help No estimated tax payment was made for the year, and no overpayment from the previous year (or from any amended return) was applied to this year under your child's name and social security number. Tax debt help No federal income tax was taken out of your child's income under the backup withholding rules. Tax debt help You are the parent whose return must be used when applying the special tax rules for children. Tax debt help (See Which Parent's Return To Use , earlier. Tax debt help ) These conditions are also shown in Figure 31-A. Tax debt help Certain January 1 birthdays. Tax debt help   A child born on January 1, 1995, is considered to be age 19 at the end of 2013. Tax debt help You cannot make this election for such a child unless the child was a full-time student. Tax debt help   A child born on January 1, 1990, is considered to be age 24 at the end of 2013. Tax debt help You cannot make this election for such a child. Tax debt help Full-time student. Tax debt help   A full-time student is a child who during some part of each of any 5 calendar months of the year was enrolled as a full-time student at a school, or took a full-time on-farm training course given by a school or a state, county, or local government agency. Tax debt help A school includes a technical, trade, or mechanical school. Tax debt help It does not include an on-the-job training course, correspondence school, or school offering courses only through the Internet. Tax debt help How to make the election. Tax debt help   Make the election by attaching Form 8814 to your Form 1040. Tax debt help (If you make this election, you cannot file Form 1040A or Form 1040EZ. Tax debt help ) Attach a separate Form 8814 for each child for whom you make the election. Tax debt help You can make the election for one or more children and not for others. Tax debt help Effect of Making the Election The federal income tax on your child's income may be more if you make the Form 8814 election. Tax debt help Rate may be higher. Tax debt help   If your child received qualified dividends or capital gain distributions, you may pay up to $100 more tax if you make this election instead of filing a separate tax return for the child. Tax debt help This is because the tax rate on the child's income between $1,000 and $2,000 is 10% if you make this election. Tax debt help However, if you file a separate return for the child, the tax rate may be as low as 0% (zero percent) because of the preferential tax rates for qualified dividends and capital gain distributions. Tax debt help Deductions you cannot take. Tax debt help   By making the Form 8814 election, you cannot take any of the following deductions that the child would be entitled to on his or her return. Tax debt help The additional standard deduction if the child is blind. Tax debt help The deduction for a penalty on an early withdrawal of your child's savings. Tax debt help Itemized deductions (such as your child's investment expenses or charitable contributions). Tax debt help Reduced deductions or credits. Tax debt help   If you use Form 8814, your increased adjusted gross income may reduce certain deductions or credits on your return including the following. Tax debt help Deduction for contributions to a traditional individual retirement arrangement (IRA). Tax debt help Deduction for student loan interest. Tax debt help Itemized deductions for medical expenses, casualty and theft losses, and certain miscellaneous expenses. Tax debt help Credit for child and dependent care expenses. Tax debt help Child tax credit. Tax debt help Education tax credits. Tax debt help Earned income credit. Tax debt help Penalty for underpayment of estimated tax. Tax debt help   If you make this election for 2013 and did not have enough tax withheld or pay enough estimated tax to cover the tax you owe, you may be subject to a penalty. Tax debt help If you plan to make this election for 2014, you may need to increase your federal income tax withholding or your estimated tax payments to avoid the penalty. Tax debt help See chapter 4 for more information. Tax debt help Figuring Child's Income Use Form 8814, Part I, to figure your child's interest and dividend income to report on your return. Tax debt help Only the amount over $2,000 is added to your income. Tax debt help The amount over $2,000 is shown on Form 8814, line 6. Tax debt help Unless the child's income includes qualified dividends or capital gain distributions (discussed next), the same amount is shown on Form 8814, line 12. Tax debt help Include the amount from Form 8814, line 12, on Form 1040, line 21. Tax debt help Enter “Form 8814” on the dotted line next to line 21. Tax debt help If you file more than one Form 8814, include the total amounts from line 12 of all your Forms 8814 on Form 1040, line 21. Tax debt help Capital gain distributions and qualified dividends. Tax debt help   If your child's dividend income included any capital gain distributions, see Capital gain distributions under Figuring Child's Income in Publication 929, Part 2. Tax debt help If your child's dividend income included any qualified dividends, see Qualified dividends under Figuring Child's Income in Publication 929, Part 2. Tax debt help Figuring Additional Tax Use Form 8814, Part II, to figure the tax on the $2,000 of your child's interest and dividends that you do not include in your income. Tax debt help This tax is added to the tax figured on your income. Tax debt help This additional tax is the smaller of: 10% × (your child's gross income − $1,000), or $100. Tax debt help Include the amount from line 15 of all your Forms 8814 in the total on Form 1040, line 44. Tax debt help Check box a on Form 1040, line 44. Tax debt help Figure 31-A. Tax debt help Can You Include Your Child's Income On Your Tax Return? Please click here for the text description of the image. Tax debt help Figure 31–A. Tax debt help Can You Include Your Child's Income On Your Tax Return? Tax for Certain Children Who Have Unearned Income If a child's interest, dividends, and other unearned income total more than $2,000, part of that income may be taxed at the parent's tax rate instead of the child's tax rate. Tax debt help If the parent does not or cannot choose to include the child's income on the parent's return, use Form 8615 to figure the child's tax. Tax debt help Attach the completed form to the child's Form 1040 or Form 1040A. Tax debt help When Form 8615 must be filed. Tax debt help   Form 8615 must be filed for a child if all of the following statements are true. Tax debt help The child's investment income was more than $2,000. Tax debt help The child is required to file a return for 2013. Tax debt help The child either: Was under age 18 at the end of the year, Was age 18 at the end of the year and did not have earned income that was more than half of his or her support, or Was over age 18 and under age 24 at the end of the year, was a full-time student, and did not have earned income that was more than half of his or her support. Tax debt help At least one of the child's parents was alive at the end of 2013. Tax debt help The child does not file a joint return for 2013. Tax debt help These conditions are also shown in  Figure 31-B. Tax debt help Earned income. Tax debt help   Earned income includes salaries, wages, tips, and other payments received for personal services performed. Tax debt help It does not include unearned income as defined later in this chapter. Tax debt help Support. Tax debt help   Your child's support includes all amounts spent to provide the child with food, lodging, clothing, education, medical and dental care, recreation, transportation, and similar necessities. Tax debt help To figure your child's support, count support provided by you, your child, and others. Tax debt help However, a scholarship received by your child is not considered support if your child is a full-time student. Tax debt help See chapter 3 for details about support. Tax debt help Certain January 1 birthdays. Tax debt help   Use the following chart to determine whether certain children with January 1 birthdays meet condition 3 under When Form 8615 must be filed. Tax debt help Figure 31-B. Tax debt help Do You Have To Use Form 8615 To Figure Your Child's Tax? Please click here for the text description of the image. Tax debt help Figure 31-B. Tax debt help Do You Have To Use Form 8615 To Figure Your Child's Tax?    IF a child was born on. Tax debt help . Tax debt help . Tax debt help THEN, at the end of 2013, the child is considered to be. Tax debt help . Tax debt help . Tax debt help January 1, 1996 18* January 1, 1995 19** January 1, 1990 24*** *This child is not under age 18. Tax debt help The child meets condition 3 only if the child did not have earned income that was more than half of the child's support. Tax debt help  **This child meets condition 3 only if the child was a full-time student who did not have earned income that was more than half of the child's support. Tax debt help  ***Do not use Form 8615 for this child. Tax debt help Providing Parental Information (Form 8615, lines A–C) On Form 8615, lines A and B, enter the parent's name and social security number. Tax debt help (If the parents filed a joint return, enter the name and social security number listed first on the joint return. Tax debt help ) On line C, check the box for the parent's filing status. Tax debt help See Which Parent's Return To Use at the beginning of this chapter for information on which parent's return information must be used on Form 8615. Tax debt help Parent with different tax year. Tax debt help   If the parent and the child do not have the same tax year, complete Form 8615 using the information on the parent's return for the tax year that ends in the child's tax year. Tax debt help Parent's return information not known timely. Tax debt help   If the information needed from the parent's return is not known by the time the child's return is due (usually April 15), you can file the return using estimates. Tax debt help   You can use any reasonable estimate. Tax debt help This includes using information from last year's return. Tax debt help If you use an estimated amount on Form 8615, enter “Estimated” on the line next to the amount. Tax debt help    When you get the correct information, file an amended return on Form 1040X, Amended U. Tax debt help S. Tax debt help Individual Income Tax Return. Tax debt help   Instead of using estimates, you can get an automatic 6-month extension of time to file if, by the date your return is due, you file Form 4868, Application for Automatic Extension of Time To File U. Tax debt help S. Tax debt help Individual Income Tax Return. Tax debt help Extensions are discussed in chapter 1. Tax debt help Step 1. Tax debt help Figuring the Child's Net Unearned Income (Form 8615, Part I) The first step in figuring a child's tax using Form 8615 is to figure the child's net unearned income. Tax debt help To do that, use Form 8615, Part I. Tax debt help Line 1 (unearned income). Tax debt help   If the child had no earned income, enter on this line the adjusted gross income shown on the child's return. Tax debt help Adjusted gross income is shown on Form 1040, line 38, or Form 1040A, line 22. Tax debt help Form 1040EZ cannot be used if Form 8615 must be filed. Tax debt help   If the child had earned income, figure the amount to enter on Form 8615, line 1, by using the worksheet in the instructions for the form. Tax debt help   However, if the child has: excluded any foreign earned income, deducted either a loss from self-employment, or deducted a net operating loss from another year, then use the Alternate Worksheet for Form 8615, Line 1, in Publication 929 to figure the amount to enter on Form 8615, line 1. Tax debt help Unearned income defined. Tax debt help   Unearned income is generally all income other than salaries, wages, and other amounts received as pay for work actually done. Tax debt help It includes taxable interest, dividends (including capital gain distributions), capital gains, unemployment compensation, the taxable part of social security and pension payments, and certain distributions from trusts. Tax debt help Unearned income includes amounts produced by assets the child obtained with earned income (such as interest on a savings account into which the child deposited wages). Tax debt help Nontaxable income. Tax debt help   For this purpose, unearned income includes only amounts the child must include in total income. Tax debt help Nontaxable unearned income, such as tax-exempt interest and the nontaxable part of social security and pension payments, is not included. Tax debt help Income from property received as a gift. Tax debt help   A child's unearned income includes all income produced by property belonging to the child. Tax debt help This is true even if the property was transferred to the child, regardless of when the property was transferred or purchased or who transferred it. Tax debt help   A child's unearned income includes income produced by property given as a gift to the child. Tax debt help This includes gifts to the child from grandparents or any other person and gifts made under the Uniform Gift to Minors Act. Tax debt help Example. Tax debt help Amanda Black, age 13, received the following income. Tax debt help Dividends — $800 Wages — $2,100 Taxable interest — $1,200 Tax-exempt interest — $100 Net capital gains — $100 The dividends were qualified dividends on stock given to her by her grandparents. Tax debt help Amanda's unearned income is $2,100. Tax debt help This is the total of the dividends ($800), taxable interest ($1,200), and net capital gains ($100). Tax debt help Her wages are earned (not unearned) income because they are received for work actually done. Tax debt help Her tax-exempt interest is not included because it is nontaxable. Tax debt help Trust income. Tax debt help   If a child is the beneficiary of a trust, distributions of taxable interest, dividends, capital gains, and other unearned income from the trust are unearned income to the child. Tax debt help   However, for purposes of completing Form 8615, a taxable distribution from a qualified disability trust is considered earned income, not unearned income. Tax debt help Line 2 (deductions). Tax debt help   If the child does not itemize deductions on Schedule A (Form 1040), enter $2,000 on line 2. Tax debt help   If the child does itemize deductions, enter on line 2 the larger of: $1,000 plus the portion of the child's itemized deductions on Schedule A (Form 1040), line 29, that are directly connected with the production of unearned income entered on line 1, or $2,000. Tax debt help Directly connected. Tax debt help   Itemized deductions are directly connected with the production of unearned income if they are for expenses paid to produce or collect taxable income or to manage, conserve, or maintain property held for producing income. Tax debt help These expenses include custodian fees and service charges, service fees to collect taxable interest and dividends, and certain investment counsel fees. Tax debt help   These expenses are added to certain other miscellaneous itemized deductions on Schedule A (Form 1040). Tax debt help Only the amount greater than 2% of the child's adjusted gross income can be deducted. Tax debt help See chapter 28 for more information. Tax debt help Example 1. Tax debt help Roger, age 12, has unearned income of $8,000, no other income, no adjustments to income, and itemized deductions of $300 (net of the 2% limit) that are directly connected with his unearned income. Tax debt help His adjusted gross income is $8,000, which is entered on Form 1040, line 38, and on Form 8615, line 1. Tax debt help Roger enters $2,000 on line 2 because that is more than the total of $1,000 plus his directly connected itemized deductions of $300. Tax debt help Example 2. Tax debt help Eleanor, age 8, has unearned income of $16,000 and an early withdrawal penalty of $100. Tax debt help She has no other income. Tax debt help She has itemized deductions of $1,050 (net of the 2% limit) that are directly connected with the production of her unearned income. Tax debt help Her adjusted gross income, entered on line 1, is $15,900 ($16,000 − $100). Tax debt help The amount on line 2 is $2,050. Tax debt help This is the larger of: $1,000 plus the $1,050 of directly connected itemized deductions, or $2,000. Tax debt help Line 3. Tax debt help   Subtract line 2 from line 1 and enter the result on this line. Tax debt help If zero or less, do not complete the rest of the form. Tax debt help However, you must still attach Form 8615 to the child's tax return. Tax debt help Figure the tax on the child's taxable income in the normal manner. Tax debt help Line 4 (child's taxable income). Tax debt help   Enter on line 4 the child's taxable income from Form 1040, line 43, or Form 1040A, line 27. Tax debt help   However, if the child files Form 2555 or 2555-EZ to claim the foreign earned income exclusion, housing exclusion, or housing deduction, see the Form 8615 instructions or Pub. Tax debt help 929. Tax debt help Line 5 (net unearned income). Tax debt help   A child's net unearned income cannot be more than his or her taxable income. Tax debt help Enter on Form 8615, line 5, the smaller of line 3 or line 4. Tax debt help This is the child's net unearned income. Tax debt help   If zero or less, do not complete the rest of the form. Tax debt help However, you must still attach Form 8615 to the child's tax return. Tax debt help Figure the tax on the child's taxable income in the normal manner. Tax debt help Step 2. Tax debt help Figuring Tentative Tax at the Parent's Tax Rate (Form 8615, Part II) The next step in completing Form 8615 is to figure a tentative tax on the child's net unearned income at the parent's tax rate. Tax debt help The tentative tax at the parent's tax rate is the difference between the tax on the parent's taxable income figured with the child's net unearned income (plus the net unearned income of any other child whose Form 8615 includes the tax return information of that parent) and the tax figured without it. Tax debt help When figuring the tentative tax at the parent's tax rate on Form 8615, do not refigure any of the exclusions, deductions, or credits on the parent's return because of the child's net unearned income. Tax debt help For example, do not refigure the medical expense deduction. Tax debt help Figure the tentative tax on Form 8615, lines 6 through 13. Tax debt help Note. Tax debt help If the child or parent has any capital gains or losses, get Publication 929 for help in completing Form 8615, Part II. Tax debt help Line 6 (parent's taxable income). Tax debt help   Enter on line 6 the parent's taxable income from Form 1040, line 43, Form 1040A, line 27, or Form 1040EZ, line 6. Tax debt help   If the Foreign Earned Income Tax Worksheet (in the Form 1040 instructions) was used to figure the parent's tax, enter the amount from line 3 of that worksheet instead of the parent's taxable income. Tax debt help Line 7 (net unearned income of other children). Tax debt help   If the tax return information of the parent is also used on any other child's Form 8615, enter on line 7 the total of the amounts from line 5 of all the other children's Forms 8615. Tax debt help Do not include the amount from line 5 of the Form 8615 being completed. Tax debt help Example. Tax debt help Paul and Jane Persimmon have three children, Sharon, Jerry, and Mike, who must attach Form 8615 to their tax returns. Tax debt help The children's net unearned income amounts on line 5 of their Forms 8615 are: Sharon — $800 Jerry — $600 Mike — $1,000 Line 7 of Sharon's Form 8615 will show $1,600, the total of the amounts on line 5 of Jerry's and Mike's Forms 8615. Tax debt help Line 7 of Jerry's Form 8615 will show $1,800 ($800 + $1,000). Tax debt help Line 7 of Mike's Form 8615 will show $1,400 ($800 + $600). Tax debt help Other children's information not available. Tax debt help   If the net unearned income of the other children is not available when the return is due, either file the return using estimates or get an extension of time to file. Tax debt help See Parent's return information not known timely , earlier. Tax debt help Line 11 (tentative tax). Tax debt help   Subtract line 10 from line 9 and enter the result on this line. Tax debt help This is the tentative tax. Tax debt help   If line 7 is blank, skip lines 12a and 12b and enter the amount from line 11 on line 13. Tax debt help Also skip the discussion for lines 12a and 12b that follows. Tax debt help Lines 12a and 12b (dividing the tentative tax). Tax debt help   If an amount is entered on line 7, divide the tentative tax shown on line 11 among the children according to each child's share of the total net unearned income. Tax debt help This is done on lines 12a, 12b, and 13. Tax debt help Add the amount on line 7 to the amount on line 5 and enter the total on line 12a. Tax debt help Divide the amount on line 5 by the amount on line 12a and enter the result, as a decimal, on line 12b. Tax debt help Example. Tax debt help In the earlier example under Line 7 (net unearned income of other children), Sharon's Form 8615 shows $1,600 on line 7. Tax debt help The amount entered on line 12a is $2,400, the total of the amounts on lines 5 and 7 ($800 + $1,600). Tax debt help The decimal on line 12b is  . Tax debt help 333, figured as follows and rounded to three places. Tax debt help   $800 = . Tax debt help 333     $2,400   Step 3. Tax debt help Figuring the Child's Tax (Form 8615, Part III) The final step in figuring a child's tax using Form 8615 is to determine the larger of: The total of: The child's share of the tentative tax based on the parent's tax rate, plus The tax on the child's taxable income in excess of net unearned income, figured at the child's tax rate, or The tax on the child's taxable income, figured at the child's tax rate. Tax debt help This is the child's tax. Tax debt help It is figured on Form 8615, lines 14 through 18. Tax debt help Alternative minimum tax. Tax debt help   A child may be subject to alternative minimum tax (AMT) if he or she has certain items given preferential treatment under the tax law. Tax debt help See Alternative Minimum Tax (AMT) in chapter 30. Tax debt help    For more information on who is liable for AMT and how to figure it, see Form 6251, Alternative Minimum Tax—Individuals. Tax debt help For information on special limits that apply to a child who files Form 6251, see Certain Children Under Age 24 in the Instructions for Form 6251. Tax debt help Prev  Up  Next   Home   More Online Publications
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Tax debt help 36. Tax debt help   Earned Income Credit (EIC) Table of Contents What's New Reminders Introduction Useful Items - You may want to see: Do You Qualify for the Credit?If Improper Claim Made in Prior Year Part A. Tax debt help Rules for EveryoneRule 1. Tax debt help Your AGI Must Be Less Than: Rule 2. Tax debt help You Must Have a Valid Social Security Number (SSN) Rule 3. Tax debt help Your Filing Status Cannot Be Married Filing Separately Rule 4. Tax debt help You Must Be a U. Tax debt help S. Tax debt help Citizen or Resident Alien All Year Rule 5. Tax debt help You Cannot File Form 2555 or Form 2555-EZ Rule 6. Tax debt help Your Investment Income Must Be $3,300 or Less Rule 7. Tax debt help You Must Have Earned Income Part B. Tax debt help Rules If You Have a Qualifying ChildRule 8. Tax debt help Your Child Must Meet the Relationship, Age, Residency, and Joint Return Tests Rule 9. Tax debt help Your Qualifying Child Cannot Be Used By More Than One Person To Claim the EIC Rule 10. Tax debt help You Cannot Be a Qualifying Child of Another Taxpayer Part C. Tax debt help Rules If You Do Not Have a Qualifying ChildRule 11. Tax debt help You Must Be at Least Age 25 but Under Age 65 Rule 12. Tax debt help You Cannot Be the Dependent of Another Person Rule 13. Tax debt help You Cannot Be a Qualifying Child of Another Taxpayer Rule 14. Tax debt help You Must Have Lived in the United States More Than Half of the Year Part D. Tax debt help Figuring and Claiming the EICRule 15. Tax debt help Your Earned Income Must Be Less Than: IRS Will Figure the EIC for You How To Figure the EIC Yourself ExamplesExample 1. Tax debt help John and Janet Smith (Form 1040A) Example 2. Tax debt help Kelly Green (Form 1040EZ) What's New Earned income amount is more. Tax debt help  The maximum amount of income you can earn and still get the credit has increased. Tax debt help You may be able to take the credit if: You have three or more qualifying children and you earned less than $46,227 ($51,567 if married filing jointly), You have two qualifying children and you earned less than $43,038 ($48,378 if married filing jointly), You have one qualifying child and you earned less than $37,870 ($43,210 if married filing jointly), or You do not have a qualifying child and you earned less than $14,340 ($19,680 if married filing jointly). Tax debt help Your adjusted gross income also must be less than the amount in the above list that applies to you. Tax debt help For details, see Rules 1 and 15. Tax debt help Investment income amount is more. Tax debt help  The maximum amount of investment income you can have and still get the credit has increased to $3,300. Tax debt help See Rule 6. Tax debt help Reminders Increased EIC on certain joint returns. Tax debt help  A married person filing a joint return may get more EIC than someone with the same income but a different filing status. Tax debt help As a result, the EIC table has different columns for married persons filing jointly than for everyone else. Tax debt help When you look up your EIC in the EIC Table, be sure to use the correct column for your filing status and the number of children you have. Tax debt help Online help. Tax debt help  You can use the EITC Assistant at www. Tax debt help irs. Tax debt help gov/eitc to find out if you are eligible for the credit. Tax debt help The EITC Assistant is available in English and Spanish. Tax debt help EIC questioned by IRS. Tax debt help  The IRS may ask you to provide documents to prove you are entitled to claim the EIC. Tax debt help We will tell you what documents to send us. Tax debt help These may include: birth certificates, school records, medical records, etc. Tax debt help The process of establishing your eligibility will delay your refund. Tax debt help Introduction The earned income credit (EIC) is a tax credit for certain people who work and have less than $51,567 of earned income. Tax debt help A tax credit usually means more money in your pocket. Tax debt help It reduces the amount of tax you owe. Tax debt help The EIC may also give you a refund. Tax debt help How do you get the earned income credit?   To claim the EIC, you must: Qualify by meeting certain rules, and File a tax return, even if you: Do not owe any tax, Did not earn enough money to file a return, or Did not have income taxes withheld from your pay. Tax debt help When you complete your return, you can figure your EIC by using a worksheet in the instructions for Form 1040, Form 1040A, or Form 1040EZ. Tax debt help Or, if you prefer, you can let the IRS figure the credit for you. Tax debt help How will this chapter help you?   This chapter will explain the following. Tax debt help The rules you must meet to qualify for the EIC. Tax debt help How to figure the EIC. Tax debt help Useful Items - You may want to see: Publication 596 Earned Income Credit (EIC) Form (and Instructions) Schedule EIC Earned Income Credit (Qualifying Child Information) 8862 Information To Claim Earned Income Credit After Disallowance Do You Qualify for the Credit? To qualify to claim the EIC, you must first meet all of the rules explained in Part A, Rules for Everyone . Tax debt help Then you must meet the rules in Part B, Rules If You Have a Qualifying Child , or Part C, Rules If You Do Not Have a Qualifying Child . Tax debt help There is one final rule you must meet in Part D, Figuring and Claiming the EIC . Tax debt help You qualify for the credit if you meet all the rules in each part that applies to you. Tax debt help If you have a qualifying child, the rules in Parts A, B, and D apply to you. Tax debt help If you do not have a qualifying child, the rules in Parts A, C, and D apply to you. Tax debt help Table 36-1, Earned Income Credit in a Nutshell. Tax debt help   Use Table 36–1 as a guide to Parts A, B, C, and D. Tax debt help The table is a summary of all the rules in each part. Tax debt help Do you have a qualifying child?   You have a qualifying child only if you have a child who meets the four tests described in Rule 8 and illustrated in Figure 36–1. Tax debt help If Improper Claim Made in Prior Year If your EIC for any year after 1996 was denied or reduced for any reason other than a math or clerical error, you must attach a completed Form 8862 to your next tax return to claim the EIC. Tax debt help You must also qualify to claim the EIC by meeting all the rules described in this chapter. Tax debt help However, if your EIC was denied or reduced as a result of a math or clerical error, do not attach Form 8862 to your next tax return. Tax debt help For example, if your arithmetic is incorrect, the IRS can correct it. Tax debt help If you do not provide a correct social security number, the IRS can deny the EIC. Tax debt help These kinds of errors are called math or clerical errors. Tax debt help If your EIC for any year after 1996 was denied and it was determined that your error was due to reckless or intentional disregard of the EIC rules, then you cannot claim the EIC for the next 2 years. Tax debt help If your error was due to fraud, then you cannot claim the EIC for the next 10 years. Tax debt help More information. Tax debt help   See chapter 5 in Publication 596 for more detailed information about the disallowance period and Form 8862. Tax debt help Part A. Tax debt help Rules for Everyone This part of the chapter discusses Rules 1 through 7. Tax debt help You must meet all seven rules to qualify for the earned income credit. Tax debt help If you do not meet all seven rules, you cannot get the credit and you do not need to read the rest of the chapter. Tax debt help If you meet all seven rules in this part, then read either Part B or Part C (whichever applies) for more rules you must meet. Tax debt help Rule 1. Tax debt help Your AGI Must Be Less Than: $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children, $43,038 ($48,378 for married filing jointly) if you have two qualifying children, $37,870 ($43,210 for married filing jointly) if you have one qualifying child, or $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. Tax debt help Adjusted gross income (AGI). Tax debt help   AGI is the amount on line 38 (Form 1040), line 22 (Form 1040A), or line 4 (Form 1040EZ). Tax debt help If your AGI is equal to or more than the applicable limit listed above, you cannot claim the EIC. Tax debt help Example. Tax debt help Your AGI is $38,550, you are single, and you have one qualifying child. Tax debt help You cannot claim the EIC because your AGI is not less than $37,870. Tax debt help However, if your filing status was married filing jointly, you might be able to claim the EIC because your AGI is less than $43,210. Tax debt help Community property. Tax debt help   If you are married, but qualify to file as head of household under special rules for married taxpayers living apart (see Rule 3 ), and live in a state that has community property laws, your AGI includes that portion of both your and your spouse's wages that you are required to include in gross income. Tax debt help This is different from the community property rules that apply under Rule 7 . Tax debt help Rule 2. Tax debt help You Must Have a Valid Social Security Number (SSN) To claim the EIC, you (and your spouse, if filing a joint return) must have a valid SSN issued by the Social Security Administration (SSA). Tax debt help Any qualifying child listed on Schedule EIC also must have a valid SSN. Tax debt help (See Rule 8 if you have a qualifying child. Tax debt help ) If your social security card (or your spouse's, if filing a joint return) says “Not valid for employment” and your SSN was issued so that you (or your spouse) could get a federally funded benefit, you cannot get the EIC. Tax debt help An example of a federally funded benefit is Medicaid. Tax debt help If you have a card with the legend “Not valid for employment” and your immigration status has changed so that you are now a U. Tax debt help S. Tax debt help citizen or permanent resident, ask the SSA for a new social security card without the legend. Tax debt help U. Tax debt help S. Tax debt help citizen. Tax debt help   If you were a U. Tax debt help S. Tax debt help citizen when you received your SSN, you have a valid SSN. Tax debt help Valid for work only with INS or DHS authorization. Tax debt help   If your social security card reads “Valid for work only with INS authorization” or “Valid for work only with DHS authorization,” you have a valid SSN, but only if that authorization is still valid. Tax debt help SSN missing or incorrect. Tax debt help   If an SSN for you or your spouse is missing from your tax return or is incorrect, you may not get the EIC. Tax debt help Other taxpayer identification number. Tax debt help   You cannot get the EIC if, instead of an SSN, you (or your spouse, if filing a joint return) have an individual taxpayer identification number (ITIN). Tax debt help ITINs are issued by the Internal Revenue Service to noncitizens who cannot get an SSN. Tax debt help No SSN. Tax debt help   If you do not have a valid SSN, put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Tax debt help You cannot claim the EIC. Tax debt help Getting an SSN. Tax debt help   If you (or your spouse, if filing a joint return) do not have an SSN, you can apply for one by filing Form SS-5, Application for a Social Security Card, with the SSA. Tax debt help You can get Form SS-5 online at www. Tax debt help socialsecurity. Tax debt help gov, from your local SSA office, or by calling the SSA at 1-800-772-1213. Tax debt help Filing deadline approaching and still no SSN. Tax debt help   If the filing deadline is approaching and you still do not have an SSN, you have two choices. Tax debt help Request an automatic 6-month extension of time to file your return. Tax debt help You can get this extension by filing Form 4868, Application for Automatic Extension of Time to File U. Tax debt help S. Tax debt help Individual Income Tax Return. Tax debt help For more information, see chapter 1 . Tax debt help File the return on time without claiming the EIC. Tax debt help After receiving the SSN, file an amended return (Form 1040X, Amended U. Tax debt help S. Tax debt help Individual Income Tax Return) claiming the EIC. Tax debt help Attach a filled-in Schedule EIC if you have a qualifying child. Tax debt help Table 36-1. Tax debt help Earned Income Credit in a Nutshell First, you must meet all the rules in this column. Tax debt help Second, you must meet all the rules in one of these columns, whichever applies. Tax debt help Third, you must meet the rule in this column. Tax debt help Part A. Tax debt help  Rules for Everyone Part B. Tax debt help  Rules If You Have a Qualifying Child Part C. Tax debt help  Rules If You Do Not Have a Qualifying Child Part D. Tax debt help  Figuring and Claiming the EIC 1. Tax debt help Your adjusted gross income (AGI) must be less than: • $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children,  • $43,038 ($48,378 for married filing jointly) if you have two qualifying children,  • $37,870 ($43,210 for married filing jointly) if you have one qualifying child, or   • $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. Tax debt help 2. Tax debt help You must have a valid social security number. Tax debt help  3. Tax debt help Your filing status cannot be “Married filing separately. Tax debt help ” 4. Tax debt help You must be a U. Tax debt help S. Tax debt help citizen or resident alien all year. Tax debt help  5. Tax debt help You cannot file Form 2555 or Form 2555-EZ (relating to foreign earned income). Tax debt help  6. Tax debt help Your investment income must be $3,300 or less. Tax debt help  7. Tax debt help You must have earned income. Tax debt help 8. Tax debt help Your child must meet the relationship, age, residency, and joint return tests. Tax debt help  9. Tax debt help Your qualifying child cannot be used by more than one person to claim the EIC. Tax debt help  10. Tax debt help You cannot be a qualifying child of another person. Tax debt help 11. Tax debt help You must be at least age 25 but under age 65. Tax debt help  12. Tax debt help You cannot be the dependent of another person. Tax debt help  13. Tax debt help You cannot be a qualifying child of another person. Tax debt help  14. Tax debt help You must have lived in the United States more than half of the year. Tax debt help 15. Tax debt help Your earned income must be less than: • $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children,  • $43,038 ($48,378 for married filing jointly) if you have two qualifying children,  • $37,870 ($43,210 for married filing jointly) if you have one qualifying child, or   • $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. Tax debt help Rule 3. Tax debt help Your Filing Status Cannot Be Married Filing Separately If you are married, you usually must file a joint return to claim the EIC. Tax debt help Your filing status cannot be “Married filing separately. Tax debt help ” Spouse did not live with you. Tax debt help   If you are married and your spouse did not live in your home at any time during the last 6 months of the year, you may be able to file as head of household, instead of married filing separately. Tax debt help In that case, you may be able to claim the EIC. Tax debt help For detailed information about filing as head of household, see chapter 2 . Tax debt help Rule 4. Tax debt help You Must Be a U. Tax debt help S. Tax debt help Citizen or Resident Alien All Year If you (or your spouse, if married) were a nonresident alien for any part of the year, you cannot claim the earned income credit unless your filing status is married filing jointly. Tax debt help You can use that filing status only if one spouse is a U. Tax debt help S. Tax debt help citizen or resident alien and you choose to treat the nonresident spouse as a U. Tax debt help S. Tax debt help resident. Tax debt help If you make this choice, you and your spouse are taxed on your worldwide income. Tax debt help If you (or your spouse, if married) were a nonresident alien for any part of the year and your filing status is not married filing jointly, enter “No” on the dotted line next to line 64a (Form 1040) or in the space to the left of line 38a (Form 1040A). Tax debt help If you need more information on making this choice, get Publication 519, U. Tax debt help S. Tax debt help Tax Guide for Aliens. Tax debt help Rule 5. Tax debt help You Cannot File Form 2555 or Form 2555-EZ You cannot claim the earned income credit if you file Form 2555, Foreign Earned Income, or Form 2555-EZ, Foreign Earned Income Exclusion. Tax debt help You file these forms to exclude income earned in foreign countries from your gross income, or to deduct or exclude a foreign housing amount. Tax debt help U. Tax debt help S. Tax debt help possessions are not foreign countries. Tax debt help See Publication 54, Tax Guide for U. Tax debt help S. Tax debt help Citizens and Resident Aliens Abroad, for more detailed information. Tax debt help Rule 6. Tax debt help Your Investment Income Must Be $3,300 or Less You cannot claim the earned income credit unless your investment income is $3,300 or less. Tax debt help If your investment income is more than $3,300, you cannot claim the credit. Tax debt help For most people, investment income is the total of the following amounts. Tax debt help Taxable interest (line 8a of Form 1040 or 1040A). Tax debt help Tax-exempt interest (line 8b of Form 1040 or 1040A). Tax debt help Dividend income (line 9a of Form 1040 or 1040A). Tax debt help Capital gain net income (line 13 of Form 1040, if more than zero, or line 10 of Form 1040A). Tax debt help If you file Form 1040EZ, your investment income is the total of the amount of line 2 and the amount of any tax-exempt interest you wrote to the right of the words “Form 1040EZ” on line 2. Tax debt help However, see Rule 6 in chapter 1 of Publication 596 if: You are filing Schedule E (Form 1040), Form 4797, or Form 8814, or You are reporting income from the rental of personal property on Form 1040, line 21. Tax debt help Rule 7. Tax debt help You Must Have Earned Income This credit is called the “earned income” credit because, to qualify, you must work and have earned income. Tax debt help If you are married and file a joint return, you meet this rule if at least one spouse works and has earned income. Tax debt help If you are an employee, earned income includes all the taxable income you get from your employer. Tax debt help If you are self-employed or a statutory employee, you will figure your earned income on EIC Worksheet B in the instructions for Form 1040. Tax debt help Earned Income Earned income includes all of the following types of income. Tax debt help Wages, salaries, tips, and other taxable employee pay. Tax debt help Employee pay is earned income only if it is taxable. Tax debt help Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. Tax debt help But there is an exception for nontaxable combat pay, which you can choose to include in earned income, as explained below. Tax debt help Net earnings from self-employment. Tax debt help Gross income received as a statutory employee. Tax debt help Wages, salaries, and tips. Tax debt help   Wages, salaries, and tips you receive for working are reported to you on Form W-2, in box 1. Tax debt help You should report these on line 1 (Form 1040EZ) or line 7 (Forms 1040A and 1040). Tax debt help Nontaxable combat pay election. Tax debt help   You can elect to include your nontaxable combat pay in earned income for the earned income credit. Tax debt help Electing to include nontaxable combat pay in earned income may increase or decrease your EIC. Tax debt help Figure the credit with and without your nontaxable combat pay before making the election. Tax debt help   If you make the election, you must include in earned income all nontaxable combat pay you received. Tax debt help If you are filing a joint return and both you and your spouse received nontaxable combat pay, you can each make your own election. Tax debt help In other words, if one of you makes the election, the other one can also make it but does not have to. Tax debt help   The amount of your nontaxable combat pay should be shown in box 12 of your Form W-2 with code “Q. Tax debt help ” Self-employed persons and statutory employees. Tax debt help   If you are self-employed or received income as a statutory employee, you must use the Form 1040 instructions to see if you qualify to get the EIC. Tax debt help Approved Form 4361 or Form 4029 This section is for persons who have an approved: Form 4361, Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science Practitioners, or Form 4029, Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits. Tax debt help Each approved form exempts certain income from social security taxes. Tax debt help Each form is discussed here in terms of what is or is not earned income for the EIC. Tax debt help Form 4361. Tax debt help   Whether or not you have an approved Form 4361, amounts you received for performing ministerial duties as an employee count as earned income. Tax debt help This includes wages, salaries, tips, and other taxable employee compensation. Tax debt help A nontaxable housing allowance or the nontaxable rental value of a home is not earned income. Tax debt help Also, amounts you received for performing ministerial duties, but not as an employee, do not count as earned income. Tax debt help Examples include fees for performing marriages and honoraria for delivering speeches. Tax debt help Form 4029. Tax debt help   Whether or not you have an approved Form 4029, all wages, salaries, tips, and other taxable employee compensation count as earned income. Tax debt help However, amounts you received as a self-employed individual do not count as earned income. Tax debt help Also, in figuring earned income, do not subtract losses on Schedule C, C-EZ, or F from wages on line 7 of Form 1040. Tax debt help Disability Benefits If you retired on disability, taxable benefits you receive under your employer's disability retirement plan are considered earned income until you reach minimum retirement age. Tax debt help Minimum retirement age generally is the earliest age at which you could have received a pension or annuity if you were not disabled. Tax debt help You must report your taxable disability payments on line 7 of either Form 1040 or Form 1040A until you reach minimum retirement age. Tax debt help Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension and are not considered earned income. Tax debt help Report taxable pension payments on Form 1040, lines 16a and 16b (or Form 1040A, lines 12a and 12b). Tax debt help Disability insurance payments. Tax debt help   Payments you received from a disability insurance policy that you paid the premiums for are not earned income. Tax debt help It does not matter whether you have reached minimum retirement age. Tax debt help If this policy is through your employer, the amount may be shown in box 12 of your Form W-2 with code “J. Tax debt help ” Income That Is Not Earned Income Examples of items that are not earned income include interest and dividends, pensions and annuities, social security and railroad retirement benefits (including disability benefits), alimony and child support, welfare benefits, workers' compensation benefits, unemployment compensation (insurance), nontaxable foster care payments, and veterans' benefits, including VA rehabilitation payments. Tax debt help Do not include any of these items in your earned income. Tax debt help Earnings while an inmate. Tax debt help   Amounts received for work performed while an inmate in a penal institution are not earned income when figuring the earned income credit. Tax debt help This includes amounts for work performed while in a work release program or while in a halfway house. Tax debt help Workfare payments. Tax debt help   Nontaxable workfare payments are not earned income for the EIC. Tax debt help These are cash payments certain people receive from a state or local agency that administers public assistance programs funded under the federal Temporary Assistance for Needy Families (TANF) program in return for certain work activities such as (1) work experience activities (including remodeling or repairing public housing) if private sector employment is not available, or (2) community service program activities. Tax debt help Community property. Tax debt help   If you are married, but qualify to file as head of household under special rules for married taxpayers living apart (see Rule 3 ), and live in a state that has community property laws, your earned income for the EIC does not include any amount earned by your spouse that is treated as belonging to you under those laws. Tax debt help That amount is not earned income for the EIC, even though you must include it in your gross income on your income tax return. Tax debt help Your earned income includes the entire amount you earned, even if part of it is treated as belonging to your spouse under your state's community property laws. Tax debt help Nevada, Washington, and California domestic partners. Tax debt help   If you are a registered domestic partner in Nevada, Washington, or California, the same rules apply. Tax debt help Your earned income for the EIC does not include any amount earned by your partner. Tax debt help Your earned income includes the entire amount you earned. Tax debt help For details, see Publication 555. Tax debt help Conservation Reserve Program (CRP) payments. Tax debt help   If you were receiving social security retirement benefits or social security disability benefits at the time you received any CRP payments, your CRP payments are not earned income for the EIC. Tax debt help Nontaxable military pay. Tax debt help   Nontaxable pay for members of the Armed Forces is not considered earned income for the EIC. Tax debt help Examples of nontaxable military pay are combat pay, the Basic Allowance for Housing (BAH), and the Basic Allowance for Subsistence (BAS). Tax debt help See Publication 3, Armed Forces' Tax Guide, for more information. Tax debt help    Combat pay. Tax debt help You can elect to include your nontaxable combat pay in earned income for the EIC. Tax debt help See Nontaxable combat pay election, earlier. Tax debt help Part B. Tax debt help Rules If You Have a Qualifying Child If you have met all of the rules in Part A , read Part B to see if you have a qualifying child. Tax debt help Part B discusses Rules 8 through 10. Tax debt help You must meet all three of these rules, in addition to the rules in Parts A and D , to qualify for the earned income credit with a qualifying child. Tax debt help You must file Form 1040 or Form 1040A to claim the EIC with a qualifying child. Tax debt help (You cannot file Form 1040EZ. Tax debt help ) You also must complete Schedule EIC and attach it to your return. Tax debt help If you meet all the rules in Part A and this part, read Part D to find out what to do next. Tax debt help If you do not meet Rule 8, you do not have a qualifying child. Tax debt help Read Part C to find out if you can get the earned income credit without a qualifying child. Tax debt help Rule 8. Tax debt help Your Child Must Meet the Relationship, Age, Residency, and Joint Return Tests Your child is a qualifying child if your child meets four tests. Tax debt help The four tests are: Relationship, Age, Residency, and Joint return. Tax debt help The four tests are illustrated in Figure 36–1. Tax debt help The paragraphs that follow contain more information about each test. Tax debt help Relationship Test To be your qualifying child, a child must be your: Son, daughter, stepchild, foster child, or a descendant of any of them (for example, your grandchild), or Brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them (for example, your niece or nephew). Tax debt help The following definitions clarify the relationship test. Tax debt help Adopted child. Tax debt help   An adopted child is always treated as your own child. Tax debt help The term “adopted child” includes a child who was lawfully placed with you for legal adoption. Tax debt help Foster child. Tax debt help   For the EIC, a person is your foster child if the child is placed with you by an authorized placement agency or by judgement, decree, or other order of any court of competent jurisdiction. Tax debt help An authorized placement agency includes a state or local government agency. Tax debt help It also includes a tax-exempt organization licensed by a state. Tax debt help In addition, it includes an Indian tribal government or an organization authorized by an Indian tribal government to place Indian children. Tax debt help Example. Tax debt help 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. Tax debt help Debbie is your foster child. Tax debt help Age Test Your child must be: Under age 19 at the end of 2013 and younger than you (or your spouse, if filing jointly), Under age 24 at the end of 2013, a student, and younger than you (or your spouse, if filing jointly), or Permanently and totally disabled at any time during 2013, regardless of age. Tax debt help    The following examples and definitions clarify the age test. Tax debt help Example 1—child not under age 19. Tax debt help Your son turned 19 on December 10. Tax debt help Unless he was permanently and totally disabled or a student, he is not a qualifying child because, at the end of the year, he was not under age 19. Tax debt help Example 2—child not younger than you or your spouse. Tax debt help Your 23-year-old brother, who is a full-time student and unmarried, lives with you and your spouse. Tax debt help He is not disabled. Tax debt help Both you and your spouse are 21 years old and you file a joint return. Tax debt help Your brother is not your qualifying child because he is not younger than you or your spouse. Tax debt help Example 3—child younger than your spouse but not younger than you. Tax debt help The facts are the same as in Example 2 except that your spouse is 25 years old. Tax debt help Because your brother is younger than your spouse, he is your qualifying child even though he is not younger than you. Tax debt help Student defined. Tax debt help   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 A student taking a full-time, on-farm training course given by a school described in (1), or a state, county, or local government. Tax debt help The 5 calendar months need not be consecutive. Tax debt help   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. Tax debt help School defined. Tax debt help   A school can be an elementary school, junior or senior high school, college, university, or technical, trade, or mechanical school. Tax debt help However, on-the-job training courses, correspondence schools, and schools offering courses only through the Internet do not count as schools for the EIC. Tax debt help Vocational high school students. Tax debt help   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. Tax debt help Permanently and totally disabled. Tax debt help   Your child is permanently and totally disabled if both of the following apply. Tax debt help He or she cannot engage in any substantial gainful activity because of a physical or mental condition. Tax debt help A doctor determines the condition has lasted or can be expected to last continuously for at least a year or can lead to death. Tax debt help Residency Test Your child must have lived with you in the United States for more than half of 2013. Tax debt help The following definitions clarify the residency test. Tax debt help United States. Tax debt help   This means the 50 states and the District of Columbia. Tax debt help It does not include Puerto Rico or U. Tax debt help S. Tax debt help possessions such as Guam. Tax debt help Homeless shelter. Tax debt help   Your home can be any location where you regularly live. Tax debt help You do not need a traditional home. Tax debt help 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. Tax debt help Military personnel stationed outside the United States. Tax debt help    U. Tax debt help S. Tax debt help 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. Tax debt help Figure 36-1. Tax debt help Tests for Qualifying Child Please click here for the text description of the image. Tax debt help Qualifying child Extended active duty. Tax debt help   Extended active duty means you are called or ordered to duty for an indefinite period or for a period of more than 90 days. Tax debt help 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. Tax debt help Birth or death of a child. Tax debt help   A child who was born or died in 2013 is treated as having lived with you for more than half of 2013 if your home was the child's home for more than half the time he or she was alive in 2013. Tax debt help Temporary absences. Tax debt help   Count time that you or your child is away from home on a temporary absence due to a special circumstance as time the child lived with you. Tax debt help Examples of a special circumstance include illness, school attendance, business, vacation, military service, and detention in a juvenile facility. Tax debt help Kidnapped child. Tax debt help    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. Tax debt help The child must be presumed by law enforcement authorities to have been kidnapped by someone who is not a member of your family or your child's family. Tax debt help This treatment applies for all years until the child is returned. Tax debt help 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. Tax debt help   If your qualifying child has been kidnapped and meets these requirements, enter “KC,” instead of a number, on line 6 of Schedule EIC. Tax debt help Joint Return Test To meet this test, the child cannot file a joint return for the year. Tax debt help Exception. Tax debt help   An exception to the joint return test applies if your child and his or her spouse file a joint return only to claim a refund of income tax withheld or estimated tax paid. Tax debt help Example 1—child files joint return. Tax debt help You supported your 18-year-old daughter, and she lived with you all year while her husband was in the Armed Forces. Tax debt help He earned $25,000 for the year. Tax debt help The couple files a joint return. Tax debt help Because your daughter and her husband filed a joint return, she is not your qualifying child. Tax debt help Example 2—child files joint return only to claim a refund of withheld tax. Tax debt help Your 18-year-old son and his 17-year-old wife had $800 of wages from part-time jobs and no other income. Tax debt help They do not have a child. Tax debt help Neither is required to file a tax return. Tax debt help Taxes were taken out of their pay, so they filed a joint return only to get a refund of the withheld taxes. Tax debt help The exception to the joint return test applies, so your son may be your qualifying child if all the other tests are met. Tax debt help Example 3—child files joint return to claim American opportunity credit. Tax debt help The facts are the same as in Example 2 except no taxes were taken out of your son's pay. Tax debt help He and his wife are not required to file a tax return, but they file a joint return to claim an American opportunity credit of $124 and get a refund of that amount. Tax debt help Because claiming the American opportunity credit is their reason for filing the return, they are not filing it only to get a refund of income tax withheld or estimated tax paid. Tax debt help The exception to the joint return test does not apply, so your son is not your qualifying child. Tax debt help Married child. Tax debt help   Even if your child does not file a joint return, if your child was married at the end of the year, he or she cannot be your qualifying child unless: You can claim an exemption for the child, or The reason you cannot claim an exemption for the child is that you let the child's other parent claim the exemption under the Special rule for divorced or separated parents (or parents who live apart) , described later. Tax debt help Social security number. Tax debt help   The qualifying child must have a valid social security number (SSN) unless the child was born and died in 2013 and you attach to your return a copy of the child's birth certificate, death certificate, or hospital records showing a live birth. Tax debt help You cannot claim the EIC on the basis of a qualifying child if: The qualifying child's SSN is missing from your tax return or is incorrect, The 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, the 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), which is issued to adopting parents who cannot get an SSN for the child being adopted until the adoption is final. Tax debt help   If you have more than one qualifying child and only one has a valid SSN, you can use only that child to claim the EIC. Tax debt help For more information about SSNs, see Rule 2 . Tax debt help Rule 9. Tax debt help Your Qualifying Child Cannot Be Used By More Than One Person To Claim the EIC Sometimes a child meets the tests to be a qualifying child of more than one person. Tax debt help However, only one of these persons can actually treat the child as a qualifying child. Tax debt help Only that person can use the child as a qualifying child to take all of the following tax benefits (provided the person is eligible for each benefit). Tax debt help The exemption for the child. Tax debt help The child tax credit. Tax debt help Head of household filing status. Tax debt help The credit for child and dependent care expenses. Tax debt help The exclusion for dependent care benefits. Tax debt help The EIC. Tax debt help The other person cannot take any of these benefits based on this qualifying child. Tax debt help In other words, you and the other person cannot agree to divide these tax benefits between you. Tax debt help The other person cannot take any of these tax benefits unless he or she has a different qualifying child. Tax debt help The tiebreaker rules explained next explain who, if anyone, can claim the EIC when more than one person has the same qualifying child. Tax debt help However, the tiebreaker rules do not apply if the other person is your spouse and you file a joint return. Tax debt help Tiebreaker rules. Tax debt help   To determine which person can treat the child as a qualifying child to claim the six tax benefits just listed, the following tiebreaker rules apply. Tax debt help If only one of the persons is the child's parent, the child is treated as the qualifying child of the parent. Tax debt help If the parents file a joint return together and can claim the child as a qualifying child, the child is treated as the qualifying child of the parents. Tax debt help If the parents do not file a joint return together 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 of time during the year. Tax debt help If the child lived with each parent for the same amount of time, the IRS will treat the child as the qualifying child of the parent who had the higher adjusted gross income (AGI) for the year. Tax debt help If no parent can claim the child as a qualifying child, the child is treated as the qualifying child of the person who had the highest AGI for the year. Tax debt help If a parent can claim the child as a qualifying child but no parent does so claim the child, the child is treated as the qualifying child of the person who had the highest AGI for the year, but only if that person's AGI is higher than the highest AGI of any of the child's parents who can claim the child. Tax debt help If the child's parents file a joint return with each other, this rule can be applied by treating the parents' total AGI as divided evenly between them. Tax debt help See Example 8 . Tax debt help   Subject to these tiebreaker rules, you and the other person may be able to choose which of you claims the child as a qualifying child. Tax debt help See Examples 1 through 13 . Tax debt help   If you cannot claim the EIC because your qualifying child is treated under the tiebreaker rules as the qualifying child of another person for 2013, you may be able to take the EIC using a different qualifying child, but you cannot take the EIC using the rules in Part C for people who do not have a qualifying child. Tax debt help If the other person cannot claim the EIC. Tax debt help   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. Tax debt help See Examples 6 and 7 . Tax debt help But you cannot treat the child as a qualifying child to claim the EIC if the other person uses the child to claim any of the other six tax benefits listed earlier. Tax debt help Examples. Tax debt help The following examples may help you in determining whether you can claim the EIC when you and someone else have the same qualifying child. Tax debt help Example 1. Tax debt help You and your 2-year-old son Jimmy lived with your mother all year. Tax debt help You are 25 years old, unmarried, and your AGI is $9,000. Tax debt help Your only income was $9,000 from a part-time job. Tax debt help Your mother's only income was $20,000 from her job, and her AGI is $20,000. Tax debt help Jimmy's father did not live with you or Jimmy. Tax debt help The special rule explained later for divorced or separated parents (or parents who live apart) does not apply. Tax debt help Jimmy is a qualifying child of both you and your mother because he meets the relationship, age, residency, and joint return tests for both you and your mother. Tax debt help However, only one of you can treat him as a qualifying child to claim the EIC (and the other tax benefits listed earlier for which that person qualifies). Tax debt help He is not a qualifying child of anyone else, including his father. Tax debt help If you do not claim Jimmy as a qualifying child for the EIC or any of the other tax benefits listed earlier, your mother can treat him as a qualifying child to claim the EIC (and any of the other tax benefits listed earlier for which she qualifies). Tax debt help Example 2. Tax debt help The facts are the same as in Example 1 except your AGI is $25,000. Tax debt help Because your mother's AGI is not higher than yours, she cannot claim Jimmy as a qualifying child. Tax debt help Only you can claim him. Tax debt help Example 3. Tax debt help The facts are the same as in Example 1 except that you and your mother both claim Jimmy as a qualifying child. Tax debt help In this case, you as the child's parent will be the only one allowed to claim Jimmy as a qualifying child for the EIC and the other tax benefits listed earlier for which you qualify. Tax debt help The IRS will disallow your mother's claim to the EIC and any of the other tax benefits listed earlier unless she has another qualifying child. Tax debt help Example 4. Tax debt help 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. Tax debt help Only one of you can claim each child. Tax debt help However, if your mother's AGI is higher than yours, you can allow your mother to claim one or more of the children. Tax debt help For example, if you claim one child, your mother can claim the other two. Tax debt help Example 5. Tax debt help The facts are the same as in Example 1 except that you are only 18 years old. Tax debt help This means you are a qualifying child of your mother. Tax debt help Because of Rule 10 , discussed next, you cannot claim the EIC and cannot claim Jimmy as a qualifying child. Tax debt help Only your mother may be able to treat Jimmy as a qualifying child to claim the EIC. Tax debt help If your mother meets all the other requirements for claiming the EIC and you do not claim Jimmy as a qualifying child for any of the other tax benefits listed earlier, your mother can claim both you and Jimmy as qualifying children for the EIC. Tax debt help Example 6. Tax debt help The facts are the same as in Example 1 except that your mother earned $50,000 from her job. Tax debt help Because your mother's earned income is too high for her to claim the EIC, only you can claim the EIC using your son. Tax debt help Example 7. Tax debt help The facts are the same as in Example 1 except that you earned $50,000 from your job and your AGI is $50,500. Tax debt help Your earned income is too high for you to claim the EIC. Tax debt help But your mother cannot claim the EIC either, because her AGI is not higher than yours. Tax debt help Example 8. Tax debt help The facts are the same as in Example 1 except that you and Jimmy's father are married to each other, live with Jimmy and your mother, and have an AGI of $30,000 on a joint return. Tax debt help If you and your husband do not claim Jimmy as a qualifying child for the EIC or any of the other tax benefits listed earlier, your mother can claim him instead. Tax debt help Even though the AGI on your joint return, $30,000, is more than your mother's AGI of $20,000, for this purpose half of the joint AGI can be treated as yours and half as your husband's. Tax debt help In other words, each parent's AGI can be treated as $15,000. Tax debt help Example 9. Tax debt help You, your husband, and your 10-year-old son Joey lived together until August 1, 2013, when your husband moved out of the household. Tax debt help In August and September, Joey lived with you. Tax debt help For the rest of the year, Joey lived with your husband, who is Joey's father. Tax debt help Joey is a qualifying child of both you and your husband because he lived with each of you for more than half the year and because he met the relationship, age, and joint return tests for both of you. Tax debt help 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 (or parents who live apart) does not apply. Tax debt help You and your husband will file separate returns. Tax debt help Your husband agrees to let you treat Joey as a qualifying child. Tax debt help This means, if your husband does not claim Joey as a qualifying child for any of the tax benefits listed earlier, you can claim him as a qualifying child for any tax benefit listed earlier for which you qualify. Tax debt help However, your filing status is married filing separately, so you cannot claim the EIC or the credit for child and dependent care expenses. Tax debt help See Rule 3 . Tax debt help Example 10. Tax debt help The facts are the same as in Example 9 except that you and your husband both claim Joey as a qualifying child. Tax debt help In this case, only your husband will be allowed to treat Joey as a qualifying child. Tax debt help This is because, during 2013, the boy lived with him longer than with you. Tax debt help You cannot claim the EIC (either with or without a qualifying child). Tax debt help However, your husband's filing status is married filing separately, so he cannot claim the EIC or the credit for child and dependent care expenses. Tax debt help See Rule 3 . Tax debt help Example 11. Tax debt help You, your 5-year-old son and your son's father lived together all year. Tax debt help You and your son's father are not married. Tax debt help Your son is a qualifying child of both you and his father because he meets the relationship, age, residency, and joint return tests for both you and his father. Tax debt help Your earned income and AGI are $12,000, and your son's father's earned income and AGI are $14,000. Tax debt help Neither of you had any other income. Tax debt help Your son's father agrees to let you treat the child as a qualifying child. Tax debt help 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 earlier, you can claim him as a qualifying child for the EIC and any of the other tax benefits listed earlier for which you qualify. Tax debt help Example 12. Tax debt help The facts are the same as in Example 11 except that you and your son's father both claim your son as a qualifying child. Tax debt help In this case, only your son's father will be allowed to treat your son as a qualifying child. Tax debt help This is because his AGI, $14,000, is more than your AGI, $12,000. Tax debt help You cannot claim the EIC (either with or without a qualifying child). Tax debt help Example 13. Tax debt help You and your 7-year-old niece, your sister's child, lived with your mother all year. Tax debt help You are 25 years old, and your AGI is $9,300. Tax debt help Your only income was from a part-time job. Tax debt help Your mother's AGI is $15,000. Tax debt help Her only income was from her job. Tax debt help Your niece's parents file jointly, have an AGI of less than $9,000, and do not live with you or their child. Tax debt help Your niece is a qualifying child of both you and your mother because she meets the relationship, age, residency, and joint return tests for both you and your mother. Tax debt help However, only your mother can treat her as a qualifying child. Tax debt help This is because your mother's AGI, $15,000, is more than your AGI, $9,300. Tax debt help Special rule for divorced or separated parents (or parents who live apart). Tax debt help   A child will be treated as the qualifying child of his or her noncustodial parent (for purposes of claiming an exemption and the child tax credit, but not for the EIC) if all of the following statements are true. Tax debt help The parents: Are divorced or legally separated under a decree of divorce or separate maintenance, Are separated under a written separation agreement, or Lived apart at all times during the last 6 months of 2013, whether or not they are or were married. Tax debt help The child received over half of his or her support for the year from the parents. Tax debt help The child is in the custody of one or both parents for more than half of 2013. Tax debt help Either of the following statements is true. Tax debt help 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. Tax debt help If the divorce decree or separation agreement went into effect after 1984 and before 2009, the noncustodial parent may be able to attach certain pages from the decree or agreement instead of Form 8332. Tax debt help A pre-1985 decree of divorce or separate maintenance or written separation agreement that applies to 2013 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 2013. Tax debt help  For details, see chapter 3. Tax debt help Also see Applying Rule 9 to divorced or separated parents (or parents who live apart) , next. Tax debt help Applying Rule 9 to divorced or separated parents (or parents who live apart). Tax debt help   If a child is treated as the qualifying child of the noncustodial parent under the special rule just described for children of divorced or separated parents (or parents who live apart), only the noncustodial parent can claim an exemption and the child tax credit for the child. Tax debt help However, the custodial parent, if eligible, or another eligible taxpayer can claim the child as a qualifying child for the EIC and other tax benefits listed earlier in this chapter. Tax debt help If the child is the qualifying child of more than one person for these benefits, then the tiebreaker rules determine which person can treat the child as a qualifying child. Tax debt help Example 1. Tax debt help You and your 5-year-old son lived all year with your mother, who paid the entire cost of keeping up the home. Tax debt help Your AGI is $10,000. Tax debt help Your mother’s AGI is $25,000. Tax debt help Your son's father did not live with you or your son. Tax debt help Under the special rule for children of divorced or separated parents (or parents who live apart), your son is treated as the qualifying child of his father, who can claim an exemption and the child tax credit for the child. Tax debt help 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. Tax debt help You and your mother did not have any child care expenses or dependent care benefits. Tax debt help If you do not claim your son as a qualifying child, your mother can claim him as a qualifying child for the EIC and head of household filing status, if she qualifies for these tax benefits. Tax debt help Example 2. Tax debt help The facts are the same as in Example 1 except that your AGI is $25,000 and your mother's AGI is $21,000. Tax debt help Your mother cannot claim your son as a qualifying child for any purpose because her AGI is not higher than yours. Tax debt help Example 3. Tax debt help 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. Tax debt help Your mother also claims him as a qualifying child for head of household filing status. Tax debt help You as the child's parent will be the only one allowed to claim your son as a qualifying child for the EIC. Tax debt help The IRS will disallow your mother's claim to the EIC and head of household filing status unless she has another qualifying child. Tax debt help Rule 10. Tax debt help You Cannot Be a Qualifying Child of Another Taxpayer You are a qualifying child of another taxpayer (your parent, guardian, foster parent, etc. Tax debt help ) if all of the following statements are true. Tax debt help You are that person's son, daughter, stepchild, foster child, or a descendant of any of them. Tax debt help Or, you are that person's brother, sister, half brother, half sister, stepbrother, or stepsister (or a descendant of any of them). Tax debt help You were: Under age 19 at the end of the year and younger than that person (or that person's spouse, if the person files jointly), Under age 24 at the end of the year, a student, and younger than that person (or that person's spouse, if the person files jointly), or Permanently and totally disabled, regardless of age. Tax debt help You lived with that person in the United States for more than half of the year. Tax debt help You are not filing a joint return for the year (or are filing a joint return only to claim a refund of withheld income tax or estimated tax paid). Tax debt help For more details about the tests to be a qualifying child, see Rule 8 . Tax debt help If you are a qualifying child of another taxpayer, you cannot claim the EIC. Tax debt help 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. Tax debt help Put “No” beside line 64a (Form 1040) or line 38a (Form 1040A). Tax debt help Example. Tax debt help You and your daughter lived with your mother all year. Tax debt help You are 22 years old, unmarried, and attended a trade school full time. Tax debt help You had a part-time job and earned $5,700. Tax debt help You had no other income. Tax debt help Because you meet the relationship, age, residency, and joint return tests, you are a qualifying child of your mother. Tax debt help She can claim the EIC if she meets all the other requirements. Tax debt help Because you are your mother's qualifying child, you cannot claim the EIC. Tax debt help This is so even if your mother cannot or does not claim the EIC. Tax debt help Child of person not required to file a return. Tax debt help   You are not the qualifying child of another taxpayer (and so may qualify to claim the EIC) if the person for whom you meet the relationship, age, residency, and joint return tests is not required to file an income tax return and either: Does not file an income tax return, or Files a return only to get a refund of income tax withheld or estimated tax paid. Tax debt help Example. Tax debt help The facts are the same as in the last example except your mother had no gross income, is not required to file a 2013 tax return, and does not file a 2013 tax return. Tax debt help As a result, you are not your mother's qualifying child. Tax debt help You can claim the EIC if you meet all the other requirements to do so. Tax debt help   See Rule 10 in Publication 596 for additional examples. Tax debt help Part C. Tax debt help Rules If You Do Not Have a Qualifying Child Read this part if you: Do not have a qualifying child, and Have met all the rules in Part A . Tax debt help  Part C discusses Rules 11 through 14. Tax debt help You must meet all four of these rules, in addition to the rules in Parts A and D , to qualify for the earned income credit without a qualifying child. Tax debt help If you have a qualifying child, the rules in this part do not apply to you. Tax debt help You can claim the credit only if you meet all the rules in Parts A, B, and D. Tax debt help See Rule 8 to find out if you have a qualifying child. Tax debt help Rule 11. Tax debt help You Must Be at Least Age 25 but Under Age 65 You must be at least age 25 but under age 65 at the end of 2013. Tax debt help If you are married filing a joint return, either you or your spouse must be at least age 25 but under age 65 at the end of 2013. Tax debt help It does not matter which spouse meets the age test, as long as one of the spouses does. Tax debt help You meet the age test if you were born after December 31, 1948, and before January 2, 1989. Tax debt help If you are married filing a joint return, you meet the age test if either you or your spouse was born after December 31, 1948, and before January 2, 1989. Tax debt help If neither you nor your spouse meets the age test, you cannot claim the EIC. Tax debt help Put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Tax debt help Death of spouse. Tax debt help   If you are filing a joint return with your spouse who died in 2013, you meet the age test if your spouse was at least age 25 but under age 65 at the time of death. Tax debt help Example 1. Tax debt help You are age 28 and unmarried. Tax debt help You meet the age test. Tax debt help Example 2—spouse meets age test. Tax debt help You are married and filing a joint return. Tax debt help You are age 23 and your spouse is age 27. Tax debt help You meet the age test because your spouse is at least age 25 but under age 65. Tax debt help Example 3—spouse dies in 2013. Tax debt help You are married and filing a joint return with your spouse who died in August 2013. Tax debt help You are age 67. Tax debt help Your spouse would have become age 65 in November 2013. Tax debt help Because your spouse was under age 65 when she died, you meet the age test. Tax debt help Rule 12. Tax debt help You Cannot Be the Dependent of Another Person If you are not filing a joint return, you meet this rule if: You checked box 6a on Form 1040 or 1040A, or You did not check the “You” box on line 5 of Form 1040EZ, and you entered $10,000 on that line. Tax debt help If you are filing a joint return, you meet this rule if: You checked both box 6a and box 6b on Form 1040 or 1040A, or You and your spouse did not check either the “You” box or the “Spouse” box on line 5 of Form 1040EZ, and you entered $20,000 on that line. Tax debt help If you are not sure whether someone else can claim you (or your spouse, if filing a joint return) as a dependent, read the rules for claiming a dependent in chapter 3. Tax debt help If someone else can claim you (or your spouse, if filing a joint return) as a dependent on his or her return, but does not, you still cannot claim the credit. Tax debt help Example 1. Tax debt help In 2013, you were age 25, single, and living at home with your parents. Tax debt help You worked and were not a student. Tax debt help You earned $7,500. Tax debt help Your parents cannot claim you as a dependent. Tax debt help When you file your return, you claim an exemption for yourself by not checking the “You” box on line 5 of your Form 1040EZ and by entering $10,000 on that line. Tax debt help You meet this rule. Tax debt help You can claim the EIC if you meet all the other requirements. Tax debt help Example 2. Tax debt help The facts are the same as in Example 1 , except that you earned $2,000. Tax debt help Your parents can claim you as a dependent but decide not to. Tax debt help You do not meet this rule. Tax debt help You cannot claim the credit because your parents could have claimed you as a dependent. Tax debt help Joint returns. Tax debt help   You generally cannot be claimed as a dependent by another person if you are married and file a joint return. Tax debt help   However, another person may be able to claim you as a dependent if you and your spouse file a joint return only to get a refund of income tax withheld or estimated tax paid. Tax debt help But neither you nor your spouse can be claimed as a dependent by another person if you claim the EIC on your joint return. Tax debt help Example 1. Tax debt help You are 26 years old. Tax debt help You and your wife live with your parents and had $800 of wages from part-time jobs and no other income. Tax debt help Neither you nor your wife is required to file a tax return. Tax debt help You do not have a child. Tax debt help Taxes were taken out of your pay, so you file a joint return only to get a refund of the withheld taxes. Tax debt help Your parents are not disqualified from claiming an exemption for you just because you filed a joint return. Tax debt help They can claim exemptions for you and your wife if all the other tests to do so are met. Tax debt help Example 2. Tax debt help The facts are the same as in Example 1 except no taxes were taken out of your pay. Tax debt help Also, you and your wife are not required to file a tax return, but you file a joint return to claim an EIC of $63 and get a refund of that amount. Tax debt help Because claiming the EIC is your reason for filing the return, you are not filing it only to get a refund of income tax withheld or estimated tax paid. Tax debt help Your parents cannot claim an exemption for either you or your wife. Tax debt help Rule 13. Tax debt help You Cannot Be a Qualifying Child of Another Taxpayer You are a qualifying child of another taxpayer (your parent, guardian, foster parent, etc. Tax debt help ) if all of the following statements are true. Tax debt help You are that person's son, daughter, stepchild, foster child, or a descendant of any of them. Tax debt help Or, you are that person's brother, sister, half brother, half sister, stepbrother, or stepsister (or a descendant of any of them). Tax debt help You were: Under age 19 at the end of the year and younger than that person (or that person's spouse, if the person files jointly), Under age 24 at the end of the year, a student (as defined in Rule 8 ), and younger than that person (or that person's spouse, if the person files jointly), or Permanently and totally disabled, regardless of age. Tax debt help You lived with that person in the United States for more than half of the year. Tax debt help You are not filing a joint return for the year (or are filing a joint return only to claim a refund of withheld income tax or estimated tax paid). Tax debt help For more details about the tests to be a qualifying child, see Rule 8 . Tax debt help If you are a qualifying child of another taxpayer, you cannot claim the EIC. Tax debt help 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. Tax debt help Put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Tax debt help Example. Tax debt help You lived with your mother all year. Tax debt help You are age 26, unmarried, and permanently and totally disabled. Tax debt help Your only income was from a community center where you went three days a week to answer telephones. Tax debt help You earned $5,000 for the year and provided more than half of your own support. Tax debt help Because you meet the relationship, age, residency, and joint return tests, you are a qualifying child of your mother for the EIC. Tax debt help She can claim the EIC if she meets all the other requirements. Tax debt help Because you are a qualifying child of your mother, you cannot claim the EIC. Tax debt help This is so even if your mother cannot or does not claim the EIC. Tax debt help Joint returns. Tax debt help   You generally cannot be a qualifying child of another taxpayer if you are married and file a joint return. Tax debt help   However, you may be a qualifying child of another taxpayer if you and your spouse file a joint return for the year only to get a refund of income tax withheld or estimated tax paid. Tax debt help But neither you nor your spouse can be a qualifying child of another taxpayer if you claim the EIC on your joint return. Tax debt help Child of person not required to file a return. Tax debt help   You are not the qualifying child of another taxpayer (and so may qualify to claim the EIC) if the person for whom you meet the relationship, age, residency, and joint return tests is not required to file an income tax return and either: Does not file an income tax return, or Files a return only to get a refund of income tax withheld or estimated tax paid. Tax debt help Example. Tax debt help You lived all year with your father. Tax debt help You are 27 years old, unmarried, permanently and totally disabled, and earned $13,000. Tax debt help You have no other income, no children, and provided more than half of your own support. Tax debt help Your father had no gross income, is not required to file a 2013 tax return, and does not file a 2013 tax return. Tax debt help As a result, you are not your father's qualifying child. Tax debt help You can claim the EIC if you meet all the other requirements to do so. Tax debt help   See Rule 13 in Publication 596 for additional examples. Tax debt help Rule 14. Tax debt help You Must Have Lived in the United States More Than Half of the Year Your home (and your spouse's, if filing a joint return) must have been in the United States for more than half the year. Tax debt help If it was not, put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). Tax debt help United States. Tax debt help   This means the 50 states and the District of Columbia. Tax debt help It does not include Puerto Rico or U. Tax debt help S. Tax debt help possessions such as Guam. Tax debt help Homeless shelter. Tax debt help   Your home can be any location where you regularly live. Tax debt help You do not need a traditional home. Tax debt help If you lived in one or more homeless shelters in the United States for more than half the year, you meet this rule. Tax debt help Military personnel stationed outside the United States. Tax debt help   U. Tax debt help S. Tax debt help military personnel stationed outside the United States on extended active duty (defined in Rule 8 ) are considered to live in the United States during that duty period for purposes of the EIC. Tax debt help Part D. Tax debt help Figuring and Claiming the EIC Read this part if you have met all the rules in Parts A and B, or all the rules in Parts A and C. Tax debt help Part D discusses Rule 15 . Tax debt help You must meet this rule, in addition to the rules in Parts A and B , or Parts A and C , to qualify for the earned income credit. Tax debt help This part of the chapter also explains how to figure the amount of your credit. Tax debt help You have two choices. Tax debt help Have the IRS figure the EIC for you. Tax debt help If you want to do this, see IRS Will Figure the EIC for You . Tax debt help Figure the EIC yourself. Tax debt help If you want to do this, see How To Figure the EIC Yourself . Tax debt help Rule 15. Tax debt help Your Earned Income Must Be Less Than: $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children, $43,038 ($48,378 for married filing jointly) if you have two qualifying children, $37,870 ($43,210 for married filing jointly) if you have one qualifying child, or $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. Tax debt help Earned income generally means wages, salaries, tips, other taxable employee pay, and net earnings from self-employment. Tax debt help Employee pay is earned income only if it is taxable. Tax debt help Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. Tax debt help But there is an exception for nontaxable combat pay, which you can choose to include in earned income. Tax debt help Earned income is explained in detail in Rule 7 . Tax debt help Figuring earned income. Tax debt help   If you are self-employed, a statutory employee, or a member of the clergy or a church employee who files Schedule SE (Form 1040), you will figure your earned income when you fill out Part 4 of EIC Worksheet B in the Form 1040 instructions. Tax debt help   Otherwise, figure your earned income by using the worksheet in Step 5 of the Form 1040 instructions for lines 64a and 64b or the Form 1040A instructions for lines 38a and 38b, or the worksheet in Step 2 of the Form 1040EZ instructions for lines 8a and 8b. Tax debt help   When using one of those worksheets to figure your earned income, you will start with the amount on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ). Tax debt help You will then reduce that amount by any amount included on that line and described in the following list: Scholarship or fellowship grants not reported on a Form W-2, Inmate's income, and Pension or annuity from deferred compensation plans. Tax debt help Scholarship or fellowship grants not reported on a Form W-2. Tax debt help   A scholarship or fellowship grant that was not reported to you on a Form W-2 is not considered earned income for the earned income credit. Tax debt help Inmate's income. Tax debt help   Amounts received for work performed while an inmate in a penal institution are not earned income for the earned income credit. Tax debt help This includes amounts received for work performed while in a work release program or while in a halfway house. Tax debt help If you received any amount for work done while an inmate in a penal institution and that amount is included in the total on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ), put “PRI” and the amount on the dotted line next to line 7 (Form 1040), in the space to the left of the entry space for line 7 (Form 1040A), or in the space to the left of line 1 (Form 1040EZ). Tax debt help Pension or annuity from deferred compensation plans. Tax debt help   A pension or annuity from a nonqualified deferred compensation plan or a nongovernmental section 457 plan is not considered earned income for the earned income credit. Tax debt help If you received such an amount and it was included in the total on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ), put “DFC” and the amount on the dotted line next to line 7 (Form 1040), in the space to the left of the entry space for line 7 (Form 1040A), or in the space to the left of line 1 (Form 1040EZ). Tax debt help This amount may be reported in box 11 of your Form W-2. Tax debt help If you received such an amount but box 11 is blank, contact your employer for the amount received as a pension or annuity. Tax debt help Clergy. Tax debt help   If you are a member of the clergy who files Schedule SE and the amount on line 2 of that schedule includes an amount that was also reported on line 7 (Form 1040), subtract that amount from the amount on line 7 (Form 1040) and enter the result in the first space of the worksheet in Step 5 of the Form 1040 instructions for lines 64a and 64b. Tax debt help Put “Clergy” on the dotted line next to line 64a (Form 1040). Tax debt help Church employees. Tax debt help    A church employee means an employee (other than a minister or member of a religious order) of a church or qualified church-controlled organization that is exempt from employer social security and Medicare taxes. Tax debt help If you received wages as a