EIC but not claim child

Would this apply to a single grandmother and her single daughter and newborn, without a father on the birth certificate? The daughter get the child tax credit, grandmother get EIC and HOH?

No. The special rule is only for the parents, and they must not be living in the same household.
In the case of a grandmother, mother and child living in the same household, either the mother or grandmother can claim the child. The grandmother must have a higher income, than the mother, to do so. Whoever claims the child claims  the child tax credit and EIC  (and dependent care credit, if applicable). The other can claim nothing. Whomever's home they are living in can claim HoH, but only if she has a qualifying dependent.

What you haven't said is where the child lives. That is, whether you are the custodial parent. If you are, you can claim EIC. You can also claim Head of Household filing status and the dependent care credit, if appropriate.

So, " not able to claim her for the EIC because she's not a dependent" is WRONG. But  if TT support said  you are not able to claim her for the EIC because you are not the custodial parent, that would be correct. If you are the custodial parent, so ahead and file your amended return.

 There is a special rule in the case of divorced & separated (including never married) parents. When the non-custodial parent is claiming the child as a dependent/exemption/child tax credit; the custodial parent is still allowed to claim the same child for Earned Income Credit, Head of Household filing status, and day care credit. This "splitting of the child" is not available to parents who lived together at any time during the last 6 months of the year; then only one of you can claim the child for any tax reasons. The tax benefits may not be split in any other manner.

Note in particular that the non-custodial parent can never claim the Earned Income Credit, Head of Household filing status or the day care credit, based on that child, even when the custodial parent has released the exemption to him.

 So, it's good idea to let the other parent know that you will be claiming those items, as many first time divorced parents are not aware of this rule and may try to claim those items, which will cause the IRS to send out letters.

Ref: http://www.irs.gov/publications/p17/ch03.html#en_US_2014_publink1000170897 Scroll down to "Children of divorced or separated parents (or parents who live apart)"

But what if the custodial parent wants to remove the EIC? This is the first year the non custodial parent was supposed to claim child for dependent credit, and already filed. Clearly misunderstood but also used TurboTax, so I'm not sure how this happened. But I need to file my taxes, they've been rejected, and I don't care if he wasn't supposed to get the EIC, I just want to file my taxes!! But I can't see how to remove it without claiming I wasn't the custodial parent, but that's not true. I am.

It's not optional. Even if you could find a work around to get TT to get rid of it, you would still be prevented from e-filing

So is the only answer to paper file, claim the EIC, and then my refund gets held up while my ex is in trouble with the IRS even though he was clueless and I should have helped him with this? I did help some, sending him the dependent care info since I assumed he'd need it, but if I had done my taxes two months ago when he did his, we wouldn't be in this situation. I'm just baffled about how Turbotax let this happen.

Yes, the only answer at this point is to paper file. He's not in trouble with the IRS (yet). He has to file an amended return, unclaiming the EIC. Your refund  will not be held up.
Actually you didn't help him by sending the dependent care info. He's not allowed to claim that either. So, he'll have to remove that as part of his amendment.

I meant to tell you thank you -- we both wen to meet with his new tax accountant (neither of us will be using TurboTax again after this, so I'm going to use the guy too in the future after this year) and he agreed with what you said. Got it all sorted out for us! Thanks.

So I just had a similar situation come up.  I'm divorced and have been the past 2 years. This year when I tried to claim the eic, it said my dependent did not qualify for taxes period, so I sent in a paper return. When I got my return I found out the removed my EIC which I believed I had the right to do.  When you said, " This "splitting of the child" is not available to parents who lived together at any time during the last 6 months of the year;", would the fact that we lived together during the year even after our divorce Make it so I could claim the eic and dependent of the child?  What would I need to show the Irs possibly to prove this?

@mistercm83 : yes, the fact that you lived together, even if legally divorced, prevents you from splitting the tax benefits. Only one parent can claim the child on his/her taxes.  But, it can be either of you (so long as the child lived with you more than half the year, 183+nights) and you can agree on which parent will claim the child. If you can't agree, then there are "tie breaker" rules that govern.

"What would I need to show the Irs possibly to prove this?"  You need to show that the other parent didn't claim the EIC, based on that child.  You may also  have to prove that the child lived with you. 

Ok im so lost and really hope this can be sorted out rather easily. So i filed my taxes just like i do every year fill out the info answer the questions and hit continue on. It asked me if i had a child in the last year which i have so i said yes. Then it said great let's see if we can add them as a dependent. It proceeded to ask me the questions have you adopted or had a child? Has the child lived with you for more then 12 months? Finally Do you have an agreement with the other parent that they are going to be claiming the child on their taxes? Yes yes and yes. Then it says with the info given you do not qualify to claim this child as a dependent. In the fine print it states that you might be able to qualify for savings however and has the option of continuing or going back to the previous question. When i hit continue it asked for my child's ssn then had the option of continuing or going back to the you don't qualify screen. So i entered my child's ssn hit continue and that was it moved on to the next section. After everything was finalized it said that i was receiving a non dependent eic. So i thought nothing of it i figured i didn't qualify to claim my child because i had an agreement with the child's other parent that they were going to be the claiming them and that i had made that clear and everything was fine. so i hit the send button. Now my gf who claimed her at work on her taxes for the whole year finally got all her w2s in goes to file and claim our as planned gets her taxes rejected because our childs ssn is on my tax return. So with all that being said i have a few questions. What is a non dependent eic? Why after i said that i wasn't claiming our child and that i had an agreement with the other parent that they were going to claim them did it then ask for my childs ssn if it was going to interfere with the other parent to where they wouldn't be able to claim said child? What can i do to fix this issue? Finally who is at fault? In my opinion i believe TurboTax is at fault because if a parent states that they have an agreement and that they are not trying to claim a child on their taxes then the option too put a ssn if its going to make it so the parent that is supposed to claim the child cannot do so then that option shouldn't even be offered at all 

@Brich22390 A common error is when unmarried parents live together,  If you and the other parent live together, only one of you can claim the child for any tax benefit. The interview is confusing (it's designed for divorced parents, who are allowed to split the child). The second parent should not enter the child, at all.

If you and the other parent live together, either one of you (but not both) may claim the child. You may decide between you which one will claim the child. Only if you can’t agree, do the IRS tie breaker rules apply, to see who has first choice. It may be worthwhile to prepare trial returns, both ways,  to see which way the family comes out best. This tool may be useful:https://turbotax.intuit.com/tax-tools/calculators/taxcaster/?s=1.

Q. What can i do to fix this issue?

A.  Your girl friend will have to mail in her return.  She can NOT e-file.  You wait to you get your refund. Then you file an amended return to unclaim what you claimed. She can file now, she does need to wait for you to amend

Q. Finally who is at fault? 

A.  "The system". As stated, the interview is complex, but it can handle the situation, if all questions are answered correctly. It requires reading the "fine print".

@Brich22390 

Btw, the fact that your  gf  claimed her at work (form W-4)  for the whole year, does not "lock in" who can claim the child at tax time.  Either one of you (but not both) can claim the child.  So, run the numbers to see which way comes out best.

The non-custodial parent can claim the dependent after you have claimed the non-dependent EIC.  Ex-spouse should follow these steps. 

1.  Click "My info" in left hand menu

2.  Click "Edit" next to the dependent they wish to claim

3.  Answer the initial questions and put in information

4.  When they get to number of months lived with them, put in something less than 6 months

5.  Continue answering questions until they get to "Do you have an agreement..."  Click "Yes"

6.  The next question asks if other parent is claiming the child, answer "No"

7.  Continue answering questions and be sure at the end that the child does NOT qualify them for head of household.

If the ex-spouse has another dependent that qualifies them for head of household that is ok, just not your dependent.

Your ex-spouse will need a copy of the form 8332 that you have signed giving away the exemption.  That form 8332 will need to be mailed in.

If your ex-spouse is filing their return electronically, they must file Form 8332 with Form 8453, U.S. Individual Income Tax Transmittal for an IRS e-file Return. Here is a link with form and instructions for the form 8453 that must accompany the 8332.  It has the address to send the forms to as well.

Its not an ex spouse we were never married and have a child she claimed her through work and i claimed 0 so when it asked did i have a child i said yes but then when it tried to see if i was claiming said child i said no that the other parent was going to claim her it then said that i didn't qualify to claim as a dependent but that i could still receive savings hit continue then it asked for our childs ssn there was no ability to skip past it so i entered the ssn and it gave me a non dependent eic and now she is trying to file and claim our child it keeps rejected it why did it ever even ask me to enter our childs ssn after it said that i didn't qualify to claim her because by me entering the ssn made it to where now she can't claim her

The bottom line is that if you claimed a child you were not entitled to claim or chose not to claim, you will have to amend and remove the child so that the other party can claim them.

As Divorced or Separated Parents who did not live together, you have special rules. If you did live together, only one of you can claim the child and all the benefits that go with them.

As divorced or separated, as above, if you are the custodial parent, then you can claim Head of Household, EIC and Child Care. Even if you release the claim of exemption to the other party and allow them to claim the dependency and Child Tax Credit, they does not qualify for the other status and credits.

@Brich22390 

Here's the actual fine print from the interview:

"Which parent can claim the dependent on their tax return if we live together but aren't married?
If you're living with the other parent and aren't married and don't have an agreement, the parent who has the highest adjusted income for the year has the right to claim the child on their tax return. However, you're allowed to have an agreement between the two of you about who will actually claim the child. In the case of an agreement, you won't have to fill out Form 8332. Keep in mind, the parent that claims the child as a dependent is the only one allowed to claim all the child-related credits such as the Earned Income Credit and Child and Dependent Care Credit. The other parent should not list the child on their tax return

However i didn't claim the child i aswered all questions truthfully it then asked is the other parent claiming this child i said yes it then said i cannot claim as a dependent so just like every other page before you have the option to continue to the next page or go back i hit continue on the very next page it asked for my child's ssn at first i hit continue thinking i could skip it it gave an error message so i then entered ssn and it said non dependent eic and then went on to head of house hold where again i filed single because we agreed that she was filling hoh as well that went through no problems im wondering why after i said that i wasn't claiming our child and it said that i couldn't claim our child did it then ask me enter our childs ssn 

I didn't want to list the child i never tried to add a dependent it asked if i had a child within the year was i at that point supposed to lie and say that i hadnt im confused all i did was say i had a kid but that my gf was filling the child under her taxes it then said i didn't qualify to claim hit continue very next page asked for my child's ssn why did it say i can't claim then turn around and ask for the ssn if it was going to interfere with my gf filling her taxes the way we planned

I'm sorry guys I understand your only trying to help this is just stressful and I'm trying to blame anyone and though I may be coming off as an a$$ I don't mean to be ugly I'm just stressing out and she's chewing me out saying I messed up this all my fault and I'm super worried that it could cause am audit and put both refunds in limbo for months and us currently living in a camper we are really relying on this refund to get back on our feet so I'm just trying to gather as much info as I can so that I can figure out exactly what happened and what the best course of action is from this point forward

Regardless of who's fault it is, the bottom line is:

1. Your girl friend is going to have to file a paper return. It can't be fixed.

2. You are going to have to file an amended return and pay back some of your refund.

She does not need to wait for you do do that. She can claim full child related benefits (EIC and child tax credit). Yes, having to mail the return will delay her refund. But you should still get your erroneous refund on time.  An IRS audit is unlikely, if you timely file an amended return and return the over payment.  You can even wait until you get her refund before filing your amended return. 

The same thing happened to me! I'm trying to look for the right solution without screwing things up more! Please let me know if you hear of what to do. I already received my return my sons father now cannot file his taxes and he is claiming him as a dependent.  My son is not a dependent on my taxes but his ssn is on their so i received and eitc but nothing else. And i didn't know it would do this , i just answered turbo taxes questions honestly.  Not sure if i should ammend or wait for a letter. I dont want to be audited or get in some kind of trouble. I will gladly ammend if I have to.

@Kyliepower3691 

This thread has gotten long and meandering, but the solution for your situation is simple (assuming you and the other parent live together):

1. The father cannot e-file. He has to mail in a paper return. He can claim the child as a dependent for full tax benefits (EITC, child tax credit and, if appropriate, Head of Household filing status and the day care credit).

2. You have to file an amended return, deleting the child and the EITC (and paying back the difference). Do not wait for the IRS letter, interest and penalties will accrue.   The IRS letter is only going to tell you to file an amended return. 

When unmarried parents live together, the 2nd parent should not enter the child, at all, on her tax return or  in TTax.

Kyliepower, my ex and I went to an accountant together that year to figure things out when I was in your kid's father's position (unpleasant surprise when I couldn't e-file). We figured out that I am always head of household since I have primary physical custody, we just take turns claiming our kid as a dependent BUT ex should never check "Head of Household." This delayed my own tax return, Ex filed an amendment (wasn't in trouble, but do that yourself soon and call the help line if you need help figuring it out), then ex had to return some of the refund he'd received (which was a bummer for him to end up with less than he'd expected). And I got my own refund waaaaay late that year. And yeah, we'd both just answered the TurboTax questions and this is why I now see that accountant every year rather than do it myself through this online software. It's a real problem that TT makes it seem so easy to just answer questions, without clarifying the difference between claiming a dependent vs. listing oneself as head of household. Also, only head of household gets to claim the child care expense either I believe. Ugh, this is why I just go see the accountant instead. Worth the money!