Publication 596 |
2000 Tax Year |
Rule 8. Your Qualifying Child Cannot Be the Qualifying Child of Another Person With a Higher Modified AGI
Sometimes a child meets the rules to be a qualifying child of more
than one person. However, only one person can claim the EIC using that
child. The paragraphs that follow will help you decide who can claim
the EIC when more than one person has the same qualifying child.
Which person can claim the EIC.
If you and someone else have the same
qualifying child,
the person with the higher
modified adjusted gross income
(AGI) is the only one who may be able to claim the EIC using that
child. The person with the lower modified AGI cannot use that child to
claim the EIC. This is true even if the person with the higher
modified AGI does not claim the EIC or meet all of the rules to claim
the EIC. If the other person is your spouse and you file a joint
return, this rule does not apply. If three or more persons have the
same qualifying child, the person with the highest modified AGI is the
only one who may be able to claim the EIC using that child.
Note. For most people modified AGI is the same as AGI
(line 34, Form 1040, line 20, Form 1040A, or line 4, Form 1040EZ).
Modified AGI is explained in detail in chapter 4.
If your qualifying child meets the tests to be a
qualifying child of any
other person for 2000 and you have the higher modified AGI, you meet
this rule. If you do not have the higher modified AGI,
STOP. You cannot claim the EIC either with or without a
qualifying child. Put "No" beside line 60a (Form 1040) or line
38a (Form 1040A).
Examples.
The following examples may help you in determining whether you can
claim the EIC when you and someone else have the same qualifying
child.
Examples: You and your child lived with your parent
Example 1.
You and your son lived with your mother all year. You are 25 years
old. Your only income was $9,300 from a part-time job. Your mother's
only income was $15,000 from her job. Your son is a qualifying child
of both you and your mother because he meets the relationship, age,
and residency tests for both you and your mother. However, because you
both have the same qualifying child, only one of you can claim the
EIC. Because your mother's modified AGI ($15,000) is more than your
modified AGI ($9,300), only your mother may be able to claim the EIC.
You cannot claim the EIC for persons either with or without a
qualifying child.
Example 2.
The facts are the same as in Example 1, but your mother
had investment income of $3,000. Your mother cannot claim the EIC
because her investment income is more than $2,400. (See Rule
5.) Even though your mother cannot claim the EIC, you cannot
claim it either because your mother's modified AGI is more than yours.
Examples: You and your child lived with another relative
Example 3.
You and your sister shared a household for the entire year. You
have three young children who lived in the household. Your sister does
not have any children. However, she cares for your children as if they
were her own. You earned $15,000 and she earned $20,000. Neither of
you had any other income.
The children meet the age and residency tests for both you and your
sister. They meet the relationship test for you because they are your
children. They also meet the relationship test for your sister because
they lived with her the whole year, she cared for them as if they were
her own, and they are her sister's children. Therefore, they qualify
as her eligible foster children. Your children are qualifying children
of both you and your sister. However, because your sister's modified
AGI is higher than yours, she is the only one who may be able to claim
the EIC.
You and your sister cannot split the three qualifying children
between you. You cannot claim the EIC even though your sister enters
the names of only two of the children on her Schedule EIC. (Schedule
EIC has spaces for the names of only two qualifying children because
the EIC is the same amount for two or more qualifying children.)
Example 4.
The facts are the same as in Example 3, except that your
oldest child is 20 years old and a full-time college student. Your
sister does not care for this child as if the child were her own. Only
the two younger children are qualifying children of both you and your
sister. Your sister is the only one who may be able to claim the EIC
using these two children because her modified AGI is higher than
yours. Your oldest child is a qualifying child of you, but not your
sister. Only you may be able to claim the EIC using this child.
Example 5.
You, your spouse, and your 10-year-old son lived together until
July 15, 2000, when your spouse moved out of the household. In
November 2000, you and your spouse were divorced. Your modified AGI
was $13,000. Your former spouse's modified AGI was $18,000. Your son
is a qualifying child of both you and your former spouse because your
son lived with each of you for more than half the year and because he
met the relationship and age tests for both of you. However, because
your former spouse's modified AGI ($18,000) was more than your
modified AGI ($13,000), your former spouse is the only one who may be
able to claim the EIC for 2000. You cannot claim the EIC for persons
either with or without a qualifying child.
Example 6.
You and your sister lived together all year. You have a
22-year-old son who lives with you, but is currently away from home
attending college full time. Your sister has a 4-year-old daughter
who lives with you and your sister. You care for your niece as you
would your own child. Your earned income and modified AGI were
$12,000. Your sister's earned income and modified AGI were $10,000.
Both children meet the age and residency tests for both you and
your sister. Your son meets the age test because he is under 24 and a
full-time student. He meets the residency test because he is only
temporarily away from home while attending college. Your niece meets
the relationship test for both you and your sister. She meets the test
for you as your eligible foster child because she is your sister's
child, she lived with you all year, and you cared for her as your own
child. Your son meets the relationship test for you but not for your
sister because she does not care for him as her own child.
Your son is the qualifying child only of you. Your niece is the
qualifying child of both you and your sister. Because your modified
AGI was higher than your sister's, only you can claim the EIC using
your niece. You can claim the EIC for two children. Your sister
cannot claim any EIC.
If your sister's modified AGI were higher than yours, she could
claim the EIC using your niece, and you could claim the credit using
your son. This is so even though you and your sister have the same
address and share the same household.
Examples: You and you child lived with
someone not related to you
Example 7.
You, your 2-year-old son, and your son's father lived together all
year. You and your son's father are not married. Your modified AGI was
$18,000. Your son's father's modified AGI was $20,000.
Your son is a qualifying child of both you and his father because
he meets the relationship, age, and residency tests for both you and
his father. Because the father's modified AGI was more than yours,
only he may be able to claim the EIC. You cannot claim the EIC for
persons either with or without a qualifying child.
Example 8.
You have two sons, ages 3 and 5. In 1998, you and your sons moved
in with your boyfriend. You are still living together. Your
boyfriend cares for your children as he would his own. In 1999, you
and your boyfriend had a baby girl. Your boyfriend's earned income
and modified AGI were higher than yours in both 1999 and 2000.
1999--All three children were qualifying children
for both you and your boyfriend. Your sons met the relationship test
for your boyfriend as his eligible foster children because they lived
with him all year, and he cared for them as his own. The law in 1999
did not impose any other requirements for them to be his eligible
foster children.
Because your boyfriend had the higher modified AGI, only he could
claim the EIC for 1999. He could claim the EIC using any two of the
three qualifying children. You could not claim any EIC.
2000--All three children are your qualifying
children. The baby is also your boyfriend's qualifying child. Your
sons are not qualifying children of your boyfriend, because they do
not qualify as his eligible foster children in 2000. See the
definition of "eligible foster child" earlier.
Because your boyfriend has the higher modified AGI, only he can
claim the EIC using the baby. You can claim the EIC using your two
sons.
Previous| First | Next
Publication Index | IRS-Forms Main | Home
|