Would the EIC apply to a student at a service academy? I didn't take it, but received an IRS notice that I might qualify and should file an amended tax return.

[xmasbaby0]

Earned Income Credit—-the rules are back to the “old” rules—

Those under 25 and over 65 without children are not eligible as they were uniquely in 2021.   And you cannot use your income from any earlier tax year to get the EIC for a 2022 return.  There is no “lookback” for 2022.  EIC for 2022 will be based on the income you earned by working in 2022.

https://ttlc.intuit.com/questions/1899157-what-are-the-qualifications-for-the-earned-income-credit-e...

https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/use-the-eitc-assistant

[bigcwoody]

Sorry, I should have clarified.  I’m asking about 2021.  That’s the year the IRS mentioned in the letter.  

[NCperson]

Since you stated you are a student , could you be claimed by someone else? 

if so, not eligible for EITC 

[Opus 17]

The IRS just says you "may" qualify.  They don't know all your facts.

Your child qualifies if they are a "qualifying child" dependent.  To be a qualifying child dependent, your child must live "at home" more than half the year and not provide more than half their own support.

Children in college are generally considered to live "at home" for purposes of the dependent rule because college is considered a temporary absence, especially if the child lives in your home there over summers and other breaks.  A child in college also usually does not provide more than half their own support.

For a child in a service academy, they would not be qualifying dependents because they are not temporarily away from home and they do provide more than half their own support.  The exception would be the first year.  If the child reports on or after July 1, then they lived "at home" more than half the year (January 1-June 30).  And probably, the support you provided at home (value of free housing, food, utilities, car, clothing, any other expenses) would be more than half their total support for the year if it was all added up. 

[bigcwoody]

While a full-time student, I’ve heard it is different at service academies.  Since there is no tuition to attend I’m fairly certain (per IRS website) that I don’t select “yes” to that question.  It specifically addresses service academies.  The question that throws me is the (paraphrasing) “do you provide at least half of your support?”   While there I get paid a salary and my parents can’t claim me as a dependent.  What’s tricky is that the hosing, meals, training, etc. provided by USMA far exceeded what I spent for myself.  

[bigcwoody]

Thanks, I think this answers my question. As such I think I am eligible for the EIC. 

[Opus 17]

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@bigcwoody wrote:

Thanks, I think this answers my question. As such I think I am eligible for the EIC. 

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If you are asking about yourself, then you need to be aware of the following:

If you take the position that you are not a student, then you would be eligible under the 2021 rules.  However, you must also have earned income from working, and your stipend may not be considered income earned from working.  It would be considered earned income only if you received a W-2 AND there was social security and medicare withholding in box 4 and 6.

For 2021 only, if you did not have earned income in 2021, you can use your 2019 earned income to figure your EIC.  Did you work in 2019?  If you are (let's guess) 18-21 in 2021, then you would have been 16-18 in 2019.  Did you work much?

You might make it work out.  But remember, the IRS only says you "might" qualify because you are a single person under age 24 who is not a dependent.  They may not have looked at your sources of income in detail.

good luck

[bigcwoody]

I definitely had a w-2 with all of the typical withholdings in 2021.  

[Opus 17]

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@bigcwoody wrote:

I definitely had a w-2 with all of the typical withholdings in 2021.  

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I still "feel" like a cadet shouldn't qualify for EIC because the government is giving you a free ride anyway.  But Congress was in such a hurry to give away money they didn't have, that they may have been too sloppy to notice what they were doing or they didn't care.  If it's legal, it's legal. Good luck. 

[SteamTrain]

You could also check with Sr staff, or your local Legal Assistance office as to whether they have any information on this for the cadets.

West Point used to provide drop off tax services for cadets, but for some reason, decided to not do so for 2022 tax preparation. 

__________

IF you go to the following page, and scroll down the left side, there is a "Tax Tips for Parents" PDF you can download and print out  (yeah, you are not a parent, but good info is in it).  And, it is for West Point, but other service academies might provide similar help on their own websites...either in the Parent sections, or the Cadet sections.

Parents Landing Page | United States Military Academy West Point

The PDF includes information about the EITC too, for everyone at West Point, including staff...BUT...it's the 2022 information there, and you are dealing with 2021, which had different rules and limits.

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If you were an entering Plebe for the last half of 2021, and not a dependent (they warn parents about that)...I guess it's possible you could qualify.

[TomD8]

Students at a service academy are considered active duty military members by federal law.  Their salary is military pay for which they receive a W-2.    It is earned income.  They are eligible to claim the EITC.  Since these young people are obligated to five years of military service upon graduation, I would hardly consider them to be receiving a "free ride", nor a "giveaway" by the Congress.

I would also point out that service academy students are not allowed to claim the American Opportunity Credit, Lifetime Learning Credit, or the Tuition and Fees deduction for books and other education-related expenses.  That's because the service academies are not "eligible educational institutions" for purposes of these credits.

Some relevant federal law:

38 USC 101(b)(21) states, "The term 'active duty' means service as a cadet at the United States Military, Air Force, or Coast Guard Academy, or as a midshipman at the United States Naval Academy."

38 USC 1965(1)(d) states, "The term 'active duty' means full-time duty as a cadet or midshipman at the United States Military Academy, United States Naval Academy, United States Air Force Academy, or the United States Coast Guard Academy."

The IRS has a page with further information on this topic:

https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/military-and-clergy-rule....