Rule 8. Your Qualifying Child Cannot Be Used By More Than One Person To Claim the EIC

Sometimes a child meets the rules to be a qualifying child of more than one person. However, only one person can treat that child as a qualifying child and claim the EIC using that child. The paragraphs that follow will help you decide who can claim the EIC when more than one person has the same qualifying child.

You can choose which person will claim the EIC.   If you and someone else have the same qualifying child, you and the other person(s) can decide who will claim the credit using that qualifying child. But if you and the other person(s) cannot agree and more than one person claims the credit using the same child, the tie-breaker rule (explained in the next paragraph) applies. If the other person is your spouse and you file a joint return, this rule does not apply.

Under the tie-breaker rule, the child can be treated as a qualifying child only by:

1. The parent, if only one of the persons is the child's parent,
2. The parent with whom the child lived for the longest period of time during the year, if two of the persons are parents of the child and they do not file a joint return together.
3. The parent with the highest adjusted gross income (AGI) if the child lived with each parent for the same amount of time during the tax year, and they do not file a joint return together.
4. The person with the highest AGI, if none of the persons is the child's parent.

If another person claims the EIC using this child.   If your qualifying child is treated under this rule as the qualifying child of another person for 2002, you cannot take the EIC using this qualifying child. You may be able to take the EIC using a different qualifying child, but you cannot take the EIC for people who do not have a qualifying child. If you do not have another qualifying child, STOP; you cannot take the EIC. Put No beside line 64 (Form 1040) or line 41 (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.

Example 1.   You and your 2-year-old son lived with your mother all year. You are 25 years old. Your only income was $9,000 from a part-time job. Your mother's only income was $20,000 from her job. Your son is a qualifying child of both you and your mother because he meets the relationship, age, and residency tests for both you and your mother. However, only one of you can use him to claim the EIC. You and your mother may choose which of you will treat the child as a qualifying child to claim the EIC. However, if you and she disagree and both use him to claim the EIC, you as the child's parent will be the only one allowed to claim the credit using this child.

Example 2.   The facts are the same as in Example 1, except that you also have two other young children who lived with you and your mother and are qualifying children of both you and your mother. Only one of you can use each child to claim the EIC. However, you and your mother can split the three qualifying children between you. For example, you can use one child to claim the EIC and your mother can use the other two.

Example 3.   The facts are the same as in Example 1, except that you are only 18 years old. This means you are a qualifying child of your mother. Because of Rule 9, you cannot claim the EIC. Only your mother may be able to treat your son as a qualifying child to claim the EIC.

Example 4.   You, your husband, and your 10-year-old son lived together until July 1, 2002, when your husband moved out of the household. In July and August, your son lived with your husband. In September and October, the boy lived with you. On November 1, 2002, you and your husband were divorced. For the rest of the year, your son lived with your ex-husband, who was given custody. Your son is a qualifying child of both you and your ex-husband because your son lived with each of you for more than half the year and because he met the relationship and age tests for both of you. You earned $11,000 during the year and your ex-husband earned $25,000. Neither of you had any other income.

You and your ex-husband may choose which of you will treat the child as a qualifying child to claim the EIC. However, if you and he are unable to agree and both use the child to claim the EIC, only your ex-husband will be allowed to claim the credit using this child. This is because, during 2002, the child lived with him longer than with you. You cannot claim the EIC for persons either with or without a qualifying child.

Example 5.   You, your 5-year-old son, and your son's father lived together all year. You and your son's father are not married. Your son is a qualifying child of both you and his father because he meets the relationship, age, and residency tests for both you and his father. You earned $8,000 and your son's father earned $18,000. Neither of you had any other income. You and your son's father may choose which of you will treat the child as a qualifying child to claim the EIC. However, if you and he are unable to agree and both use the child to claim the EIC, only the father will be allowed to claim the credit using this child. This is because his AGI ($18,000) was more than your AGI ($8,000). You cannot claim the EIC for persons either with or without a qualifying child.

Example 6.   You and your 7-year-old niece lived with your mother all year. You care for your niece as you would your own child. You are 25 years old, and your only income was $9,300 from a part-time job. Your mother's only income was $15,000 from her job. Your niece is a qualifying child of both you and your mother because she meets the relationship, age, and residency tests for both you and your mother. However, only one of you can treat her as a qualifying child to claim the EIC. You and your mother may choose which of you will use the child to claim the EIC. However, if you and she are unable to agree and both use the child to claim the EIC, only your mother will be allowed to claim the credit using this child. This is because her AGI ($15,000) is higher than your AGI ($9,300).

Rule 9. You Cannot Be a Qualifying Child of Another Person

You are a qualifying child of another person (your parent, guardian, foster parent, etc.) if all of the following statements are true.

1. You are that person's son, daughter, adopted child, stepchild, grandchild, or eligible foster child. Or, you are that person's brother, sister, stepbrother, or stepsister (or the child or grandchild of that person's brother, sister, stepbrother, or stepsister) for whom that person cares as his or her own child.
2. At the end of the year you were under age 19, or under age 24 and a full-time student, or any age if you were permanently and totally disabled at any time during the year.
3. You lived with that person in the United States for more than half of the year.

For more details about the tests to be a qualifying child, see Rule 7.

If you (or your spouse if filing a joint return) are a qualifying child of another person, you cannot claim the EIC. This is true even if the person for whom you are a qualifying child does not claim the EIC or meet all of the rules to claim the EIC. Put No beside line 64 (Form 1040) or line 41 (Form 1040A).

Example.   You and your daughter lived with your mother all year. You are 22 years old and attended a trade school full time. You had a part-time job and earned $5,700. You had no other income. Because you meet the relationship, age, and residency tests, you are a qualifying child of your mother. She can claim the EIC if she meets all the other requirements. Because you are your mother's qualifying child, you cannot claim the EIC. This is so even if your mother cannot or does not claim the EIC.

Rules If You Do Not Have a Qualifying Child

Use this chapter if you do not have a qualifying child and have met all the rules in chapter 1. This chapter discusses Rules 10 through 13. You must meet all four of those rules, in addition to the rules in chapters 1 and 4, to qualify for the earned income credit without a qualifying child.

Note. You can file Form 1040, Form 1040A, or Form 1040EZ to claim the EIC without a qualifying child. If you meet all the rules in chapter 1 and this chapter, read chapter 4 to find out what to do next.

Rule 10. 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 2002. 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 2002. It does not matter which spouse meets the age test, as long as one of the spouses does.

If neither you nor your spouse meets the age test, you cannot claim the EIC. Put No directly to the right of line 64 (Form 1040) or line 41 (Form 1040A), or on line 8 (Form 1040EZ).

Example 1.   You are age 28 and unmarried. You meet the age test.

Example 2.   You are married and filing a joint return. You are age 23 and your spouse is age 27. You meet the age test because your spouse is at least age 25 but under age 65.

Rule 11. 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 checked the No box on line 5 of Form 1040EZ.

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 checked the No box on line 5 of Form 1040EZ.

If you are not sure whether someone else can claim you (or your spouse if filing a joint return) as a dependent, get Publication 501 and read the rules for claiming a dependent.

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.

Example 1.   In 2002, you were age 25, single, and living at home with your parents. You worked and were not a student. You earned $7,500. Your parents cannot claim you as a dependent. When you file your return, you claim an exemption for yourself by checking the No box on line 5 of your Form 1040EZ. You meet this rule.

Example 2.   The facts are the same as in Example 1, except that you earned $2,000. Your parents can claim you as a dependent but decide not to. You do not meet this rule. You cannot claim the credit because your parents could have claimed you as a dependent.

Rule 12. You Cannot Be a Qualifying Child of Another Person

You are a qualifying child of another person (your parent, guardian, foster parent, etc.) if all of the following statements are true.

1. You are that person's son, daughter, adopted child, stepchild, grandchild, or eligible foster child. Or, you are that person's brother, sister, stepbrother, or stepsister or the child or grandchild of that person's brother, sister, stepbrother, or stepsister) for whom that person cares as his or her own child.
2. At the end of the year you were under age 19, or under age 24 and a full-time student, or any age if you were permanently and totally disabled at any time during the year.
3. You lived with that person in the United States for more than half of the year.

For more details about the tests to be a qualifying child, see Rule 7.

If you (or your spouse if filing a joint return) are a qualifying child of another person, you cannot claim the EIC. This is true even if the person for whom you are a qualifying child does not claim the EIC or meet all of the rules to claim the EIC. Put No directly to the right of line 64 (Form 1040) or line 41 (Form 1040A), or on line 8 (Form 1040EZ).

Example.   You lived with your mother all year. You are age 26 and permanently and totally disabled. Your only income was from a community center where you went twice a week to answer telephones. You earned $1,500 for the year. Because you meet the relationship, age, and residency tests, you are a qualifying child of your mother. She can claim the EIC if she meets all the other requirements. Because you are a qualifying child of your mother, you cannot claim the EIC. This is so even if your mother cannot or does not claim the EIC.

Rule 13. 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.

If it was not, put No directly to the right of line 64 (Form 1040) or line 41 (Form 1040A), or on line 8 (Form 1040EZ).

United States.   This means the 50 states and the District of Columbia. It does not include U.S. possessions, such as Guam and Puerto Rico.

Homeless shelter.   Your home can be any location where you regularly live. You do not need a traditional home. If you lived in one or more homeless shelters in the United States for more than half the year, you meet this rule.

Military personnel stationed outside the United States.   U.S. military personnel stationed outside the United States on extended active duty (defined on page 13) are considered to live in the United States during that duty period for purposes of the EIC.

Figuring and Claiming the EIC

You must meet two more rules to be eligible to claim the EIC.

You must figure two amounts to see if you meet the rules in this chapter. You also need to know these amounts to figure the amount of your EIC.

1. Adjusted gross income (AGI).
2. Earned income.

If all your income is from employment you can use the worksheet on page 20 to figure your earned income. Otherwise, you can figure your earned income using EIC Worksheet B on page 25.

Rule 14. Your Adjusted Gross Income (AGI) Must Be Less Than:

• $33,178 ($34,178 for married filing jointly) if you have more than one qualifying child,
• $29,201 ($30,201 for married filing jointly) if you have one qualifying child, or
• $11,060 ($12,060 for married filing jointly) if you do not have a qualifying child.

Adjusted gross income (AGI).   AGI is the amount on line 4 of Form 1040EZ, line 22 of Form 1040A, or line 36 of Form 1040.

If your AGI is equal to or more than the applicable limit listed above, you cannot claim the EIC. You do not need to read the rest of this publication. You can go back and finish the rest of your tax return.

Example.   Your AGI is $29,500, you are single, and you have one qualifying child. You cannot claim the EIC because your AGI is not less than $29,201. However, if your filing status was married filing jointly, you might be able to claim the EIC because your AGI is less than $30,201.

Community property.   If you are married, but qualify to file as head of household under special rules for married taxpayers living apart (see Rule 2), 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. This is different from the community property rules that apply under Rule 6.

Rule 15. Your Earned Income Must Be Less Than:

• $33,178 ($34,178 for married filing jointly) if you have more than one qualifying child,
• $29,201 ($30,201 for married filing jointly) if you have one qualifying child, or
• $11,060 ($12,060 for married filing jointly) if you do not have a qualifying child.

Earned income.   Earned income generally means wages, salaries, tips, and other taxable employee compensation, and net earnings from self-employment. Earned income is explained in detail in Rule 6 in chapter 1. If you are an employee, you can use Worksheet 2 to figure your earned income from employment.

However, if you are self-employed, a statutory employee, or a church employee who files Schedule SE (Form 1040), you will not know the amount of your earned income until you fill out Part 4 of EIC Worksheet B on page 25.

Church employee.   In this publication, this term 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.

Worksheet 2: Earned Income

Note. Do not include on this worksheet any net earnings from self-employment or any income you received as a statutory employee. Instead, enter those amounts on EIC Worksheet B (page 25).
1.	Enter the amount from line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ).			1.
2.	If you received a taxable scholarship or fellowship grant that was not reported to you on a Form W-2 but was included in the total on line 7 (Form 1040 or 1040A) or line 1 (Form 1040EZ), enter the amount.	2.
3.	Inmates. 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), enter that amount.	3.
4.	Clergy. 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), enter that amount.	4.
5.	Church employees. If you received wages as a church employee (as defined above), enter any amount you included on both line 5a of Schedule SE and line 7 (Form 1040).	5.
6.	If you received a pension or annuity from a nonqualified deferred compensation plan or a nongovernmental section 457 plan and it was included in the total on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ), enter the amount. (This amount may be reported in box 11 of your Form W- 2. If you received such an amount but box 11 is blank, contact your employer for the amount of the pension or annuity.)	6.
7.	Add the amounts on lines 2, 3, 4, 5, and 6 of this worksheet.			7.
8.	Subtract line 7 of this worksheet from line 1. This is your earned income.			8.

Previous | First | Next

Publication Index | 2002 Tax Help Archives | Tax Help Archives | Home