Keyword: Earned Income Tax Credit
This is archived information that pertains only to the 2003 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.
2.2 Filing Requirements/Status/Dependents/Exemptions: Filing Status
If I moved out of my house on July 1, but was not divorced at the
end of the year, can I file as head of household and take the earned income
credit if I have a minor child? Can I also claim child care expenses?
You do not qualify for the head of household filing status because you
and your spouse have not lived apart for the last 6 months of the taxable
year and are not considered unmarried. Your filing status for the year will
either be married filing separately, or married filing jointly. If it is married
filing separately, you will not qualify for the Earned Income Credit and cannot
claim a credit based on child care expenses. If you file a joint return with
your spouse, you may be eligible to claim these credits. See Publication 503, Child and Dependent Care Expenses and Publication 596, Earned Income Credit.
References:
6.3 Social Security Income: Regular & Disability Benefits
Is social security considered earned income for purposes of the
Earned Income Credit (EIC)?
Social security is not considered earned income for EIC purposes. However,
depending on your other earnings during the year, part of it may be taxable
income.
References:
8.1 Earned Income Tax Credit: Qualifying Child Rules
If the child is born in the last week of December, can the child
be a qualifying child for the Earned Income Credit and how do you file without
a social security number?
Normally, to be your qualifying child and meet the residency test, your
child must have lived with you for more than half of the tax year. For Earned
Income purposes, if your child was born or died during the year, the child
is considered to meet the test as if they child lived with you for the entire
time he or she was alive during the tax year.
For example, if your child was born on October 1, 2003, and lived with
you for the remainder of the year, your child meets the residency test.
If your child does not have a social security number, apply for one by
filling out Form SS-5 with the Social Security
Administration, or call the Social Security Administration at 1-800-772-1213.
It usually takes about 2 weeks to get a social security number.
If the filing deadline is approaching and you still do not have a social
security number, you have two choices.
1. File the return on time without claiming the Earned Income Credit. After
receiving the social security number, file Form 1040X (PDF) , Amended U.S. Individual Income Tax Return, claiming the Earned
Income Credit. Attach a completed Form 1040, Schedule EIC (PDF) , Earned
Income Credit. Refer to Tax Topic 308, Amended Returns for
information.
2. Request an automatic 4-month extension of time to file your return.
You can get this extension by filing Form 4868 (PDF), Application
for Automatic Extension of Time to File U.S. Individual Income Tax Return.
Refer to Tax Topic 304 Extensions of Time to File Your Tax Return. for
more information.
References:
My child was born and only lived 40 minutes. Can she be used as
a qualifying child when figuring the Earned Income Credit and the Child Tax
Credit?
If your child was born alive and died during the same year, and the exemption
tests are met, you can take the full exemption. This is true even if the child
lived only for a moment. Whether your child was born alive depends on state
or local law. There must be proof of a live birth shown by an official document
such as a birth certificate. Under these circumstances, if you do not have
a social security number for the child, you may attach a copy of the child's
birth certificate instead and enter "DIED" in column 2
of line 6c of the Form 1040 or 1040A.
If you have determined that you are eligible to claim your child's exemption,
you may also be eligible to claim the Child Tax Credit. Please refer to the
Instructions for Form 1040 or
Instructions for Form 1040A for
the Child Tax Credit. The referenced pages will explain who qualifies for
this credit and how to calculate it.
The Earned Income Credit generally requires that you provide a valid social
security number for your qualifying child. However, if you meet all the other
requirements to claim this credit and your child was born and died in the
same year, you will not be required to provide a social security number for
that child. Instead, you may enter "DIED" on line 4 of Form 1040, Schedule EIC (PDF), Earned Income Credit, and
attach a copy of the child's birth certificate.
References:
In order to claim the Earned Income Credit, does the child have
to be claimed as a dependent?
A qualifying child for the Earned Income Credit does not need to qualify
as a dependent unless he or she is married.
Refer to Publication 596, Earned Income Credit, for a full discussion
of the Earned Income Credit rules.
References:
If you are single with two children who lived with you all year,
but are releasing the dependency exemption for one of your dependents via
Form 8332, can both children still be considered qualifying children for Earned
Income Credit purposes?
As long as the relationship test is met, your qualifying child for the
Earned Income Credit does not need to be your dependent, unless he or she
is married. For information as to whether or not a married child is your qualifying
child for earned income credit, refer to Rule 7, Qualifying Child, in Publication 596, Earned Income Credit.
References:
If the noncustodial parent receives permission from the custodial
parent to claim a child on his or her tax return, is the noncustodial parent
eligible for the Earned Income Credit?
The noncustodial parent cannot claim the Earned Income Credit on the basis
of that child because the child did not live with that parent and does not
meet the residency test. The custodial parent may be able to claim the Earned
Income Credit.
Refer to Publication 596, Earned Income Credit, for the Earned
Income Credit rules .
References:
My wife and I have two children and we are going to file separate
returns this year. Can we each claim one child for the Earned Income Credit?
In order to qualify for the Earned Income Credit, your filing status cannot
be Married Filing Separately. If you are married, you usually must file a
joint return to claim the Earned Income Credit.
However, 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. In that case, you may be able to claim the Earned Income
Credit.
Please refer to Publication 596, Earned Income Credit, for
a complete discussion of the Earned Income Credit. Refer to Publication 501, Exemptions,
Standard Deduction, and Filing Information, for the Head of Household
filing status rules.
References:
8.2 Earned Income Tax Credit: Taxable & Nontaxable Income
Is child support considered income when calculating the Earned Income
Credit?
No, for purposes of calculating the Earned Income Credit, child support
is not considered earned income.
Please refer to Publication 596, Earned Income Credit , for
a complete discussion of the Earned Income Credit. Earned income is defined
in Rule 6 of this publication.
References:
8.3 Earned Income Tax Credit: Other EITC Issues
If both parents want to claim the Earned Income Credit, who is entitled
to it if there was no marriage?
If the child is a qualifying child of both parents, they may choose which
one will claim the credit. If there are two qualifying children, each parent
may claim the credit on the basis of one of the children. If both actually
claim the credit on the basis of the same child or children, the parent who
is entitled to the credit is the parent with whom the child lived for the
longest period of time during the tax year, or the parent with the higher
Adjusted Gross Income (AGI) if the child lived with each parent for the same
amount of time during the year.
Refer to Publication 596, Earned Income Credit, for full
discussion of the Earned Income Credit rules.
References:
Can I get the earned income credit?
You may be able to take this credit for 2003 if you did not have a qualifying
child and you earned less than $11,230 ($12,230 for married filing jointly).
You may also be able to take this credit if you had one qualifying child and
you earned less than 29,666 ($30,666 for married filing jointly), or you had
more than one qualifying child and you earned less than $33,692 ($34,692 for
married filing jointly). Other rules apply. For details, refer to Tax Topic 601, Earned Income Credit (EIC), or Publication 596, Earned
Income Credit.
References:
Can Form 1040EZ be used to claim the earned income credit?
You can use Form 1040EZ (PDF) when claiming
the earned income credit only if you do not have a qualifying child. However,
you must meet several requirements to use Form 1040EZ. If you do not meet
all of them, you must use Form 1040A (PDF) or Form 1040 (PDF). For additional information on the requirements,
refer to Tax Topic 352, Which Form - 1040, 1040A or
1040EZ.
References:
- Form 1040 (PDF), U.S. Individual
Income Tax Return
- Form 1040A (PDF), U.S. Individual
Income Tax Return
- Form 1040EZ (PDF), U.S. Individual
Income Tax Return for Single and Joint Filers with No Dependents
- Tax Topic 352, Which Form - 1040, 1040A or 1040EZ
12.3 Small Business/Self-Employed/Other Business: Form W–2, FICA, Medicare, Tips, Employee Benefits
How do I figure the amount of advance earned income credit to include
in an employee's pay?
To figure the amount of the advance EIC payment to include with the employee's
pay, you must consider:
Wages, including reported tips, for the same period. Generally, figure
advance EIC payments using the amount of wages subject to income tax withholding.
If an employee's wages are not subject to income tax withholding, use the
amount of wages subject to withholding for social security and Medicare taxes.
Whether the employee is married or single.
Whether a married employee's spouse has a Form W-5 in effect with an employer.
To figure the advance EIC payment, you may use either the Wage Bracket
Method or the Percentage Method explained in Publication 15, Circular
E, Employer's Tax Guide . You may use other methods for figuring advance
EIC payments if the amount of the payment is about the same as it would be
using tables in Publication 15. See the tolerance allowed in the chart in
section 9 of Publication 15-A (PDF) , Supplemental
Employer's Tax Guide. See section 10 in Publication 15 for an explanation
of the advance payment of the EIC.
Add the advance earned income credit payments to the employee's net pay
for the pay period. Since this amount isn't wages, you do not withhold any
income, social security, or Medicare taxes from the payment.
References:
Tax Topics & FAQs | 2003 Tax Year Archives | Tax Help Archives | Home
|
