Am I eligible for the Earned Income Credit if I live outside the U.S.?

[Steve1179]

I live outside the United States with my wife and four children.  I do not claim foreign income exclusion.  Am I eligible for the Earned Income Credit?

[ChristinaS]

No- unless you are in the military.

The Earned Income Credit requires US residency. Not taking the exclusion doesn't improve your chances of getting the Earned Income Credit if you weren't in the US for 6 months during 2016.

In some cases, taxpayers can live in the US for more than half the year and also be outside the US for a portion of the year. The foreign exclusion doesn't have to be based on a calendar year- it could be 8/2016 to 7/2017, for instance. In this situation, the IRS makes it known that the exclusion will prevent the EIC. If you are not in the US more than 6 months of the calendar year, you are excluded from EIC consideration from the start.

Its quite difficult to get the EIC if you've lived overseas for any substantial period.

Residency

Child must live with you (or your spouse if you file a joint return) in the United States for more than half of the year

https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/qualifying-child-rules

see Rule 14-

https://www.irs.gov/pub/irs-pdf/p596.pdf

[cmitchell1]

See my answer below

[cmitchell1]

I don't believe the above answer is correct and is actually VERY misleading, especially for one of the top google results.

Pub 529 states that you must be a US Citizen OR a resident alien all year, and not file form 2555 (foreign income exclusion).  So if you are a US Citizen living overseas, and properly report all your foreign income, without exluding it, then I believe you would qualify:
Rule 4—You Must Be a U.S.
Citizen or Resident Alien All
Year
https://www.irs.gov/pub/irs-pdf/p596.pdf

Also, the 6 month test that is mentioned above is related to the Qualifying Child test, not the overall EIC requirements.   Therefore, your children may not come into the equation, which will significantly lower your income threshold to qualify and the amount of credit.  Possibly reducing qualification at all.

If your kids are disqualified, the rules for the EITC for just you and your spouse are here:

https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/claiming-eitc-without-a-...

If I'm wrong however, I would love to have the clarification, as this has been a sticking point for me for awhile.