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I am helping a refugee family fill out their taxes. They have four young daughters who can qualify for the California Child Tax Credit. They also have two older daughters (over 18-years-old )who are employed. The California Child tax credit allows for only three children to be claimed -- so that means he never receives a credit for one of his younger daughters.
The Dad has asked if he can claim three of the children and his oldest daughter can claim one of them. So this way all four children will receive the credit. I looked at the rules and it seems like it would be okay. As the younger girls don't make any income, they live with them all year, and they are all related. The only sticking point is whether or not the oldest daughter has supported the one sibling financially over 50%. The parents have some income and she has some income. No doubt the parents have more income then the daughter, but I know she does help out. In a sense the parents could reasonably be supporting three children and the oldest sister's income could be supporting one of the children.
Is it okay to do this -- to have the oldest daughter claim one of the sisters?
Thanks!
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Depends. The law is that only three children can receive the credit. However, The child must be the taxpayer's son, daughter, stepson, stepdaughter, eligible foster child, adopted child, or brother, sister, half-sibling, stepsibling, or descendant of any of these individuals. Someone who only meets the “qualifying relative” test is never eligible to be claimed for purposes of the EITC.
Use this link below for additional details:
Who Qualifies for Earned Income Credit
Use this link for IRS information on EITC: Earned Income Tax Credit
Thank you for answering. The child is the tax payer's sister. So it seems like it does qualify then.
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