EITC for my grandchild
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GrandpaJ
Returning Member

EITC for my grandchild

My divorced daughter and her child, my grandchild, live with my Wife and I. My daughter provides more than half of her support thru a job and I do not claim her as a dependent. I provide more than half of the suport for our grandchild, and do claim him as my dependent. Can my daughter file as Head of Household, not claim her child as a dependent, but still claim her child for the Earned Income Tax Credit (EITC)? The EITC rules do not require the claimant to provide suppport, only residency. I do make too much to claim the EITC but my daughter does qualify.

8 Replies
NCperson
Level 15

EITC for my grandchild

for your daughter to file HOH, there needs to be a dependent.  if you claim your grandchild, that leaves your daughter as filing "single". 

assuming you claim your grandchild, for your daughter to claim EITC...

  • your daughter must be at least 25 years old. 
  • there is no requirement that she have a qualifying child to claim EITC, but HER income must be less than $15,820 to qualify. 

if she claims your grandchild, 

  • your daughter must be at least 25 years old. 
  •  HER income must be less than $41,756 to qualify.

 

also, and the rules are still murky and not programmed into TT yet, because of COVID relief, if her 2020 income is less than 2019 income and if it creates a better result, she can use 2019 income on her 2020 tax return solely to calculate EITC.  How that works and if that is the true rule is not clear as it's not programmed into TT yet.   

 

Critter-3
Level 15

EITC for my grandchild

To claim HOH that person needs to provide more then 1/2 of the total household costs so if the daughter doesn't own the home HOH is not likely.   But before any of you file a return you all need to sit down and do some calculating since the grandchild could/may be a qualifying child for both the daughter and the grand parents.   The IRS will let you choose who claims  the grandchild in that situation as long as the grandparent's income is higher than the parent's income.  If you cannot agree then the parent has the superior right to claim the grandchild. 

Hal_Al
Level 15

EITC for my grandchild

Your daughter can NOT claim the child based portion of the EITC if you are claiming her child as a dependent.  

 

"The EITC rules do not require the claimant to provide support, only residency".  That's not exactly correct.   I think what you may have heard of is "The EITC rules do not require the claimant to claim the dependent, only residency".  That's true, but only in the case of divorced or separated parents.  When the non-custodial parent is claiming the child as a dependent (and the child tax credit), the custodial (resident) parent is still allowed to claim the EITC.  That special rule does not apply when the grandparent is claiming the child as a dependent.

 

Even if your daughter is claiming her child as a dependent; it would be far fetched for her to claim Head of Household living in your home.  It's theoretically possible but  It's a tough standard to meet and most living arrangements will not qualify. If it's family and not unrelated people, like 2 single moms sharing a residence, it's even more unlikely. If you try it, be prepared to prove it with detailed accounting records of household expenses.

 

@NCperson  the age 25 rule does not apply if the mother is claiming a child as a dependent

NCperson
Level 15

EITC for my grandchild

@Hal_Al - ugh - i stand corrected, you are right....

 

so to clarify:

 

assuming you claim your grandchild, for your daughter to claim EITC...

  • your daughter must be at least 25 years old. 
  • there is no requirement that she have a qualifying child to claim EITC, but HER income must be less than $15,820 to qualify. 

if she claims your grandchild, 

  •  HER income must be less than $41,756 to qualify.
Critter-3
Level 15

EITC for my grandchild

...

NCperson
Level 15

EITC for my grandchild

@Critter-3 - I do not see that.... can you provide a reference? the item is red below says I, myself  can't be a qualifying child of another,  not that my child can't be a qualifying child of someone else.  So it precludes anyone who is under the age of 17 (a qualifying child of someone else) from submitting a tax return and getting EITC if they earn money!  I guess that is more a situation where some under 17 has a child themselves because if you have no children, you must be 25 to be eligible for EITC. 

 

https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/who-qualifies-for-the-ea...

 

Claim the EITC Without a Qualifying Child

You are eligible to claim the EITC without a qualifying child if you meet all the following rules. You (and your spouse if you file a joint tax return) must:

  • Meet the EITC basic qualifying rules
  • Have your main home in the United States for more than half the tax year
    • The United States includes the 50 states, the District of Columbia and U.S. military bases. It does not include U.S. possessions such as Guam, the Virgin Islands or Puerto Rico
  • Not be claimed as a qualifying child on anyone else's tax return

  • Be at least age 25 but under age 65 at the end of the tax year (usually Dec. 31)

You are not eligible to claim the EITC if:

Hal_Al
Level 15

EITC for my grandchild

@Critter-3  I don't see it, either

Critter-3
Level 15

EITC for my grandchild

Removed post ... rule I was referring to is very old and has been changed ... need to go to bed as my mind is fuzzy. 

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