Qualifying for the Earned Income Credit ("EIC") when Married Filing Separately ("MFS")

[HoratioHornblower]

Taxpayers were legally married as of 12/31 and they began living apart in mid-July.

Regarding the MFS disqualification exception:

IRS Publication 596 requires that "You lived apart from your spouse for the last six months of 2021".

So,  having lived apart for only 5½ months, it is clear that they would not be able to file MFS and qualify for the EIC.

The Turbotax EIC worksheet ambiguously (I would go so far as to say erroneously) phrases the determining question as follows:

"Did you and your spouse have the same principal residence for the last six months of 2021?"

Clearly, the answer to that question would legitimately be "No" in which case the program then treats the taxpayer as qualifying for the EIC with an MFS filing status.

[Bsch4477]

The IRS verbiage is:

• Do not have the same principal residence as the other spouse for at least the last six months out of the year.

[HoratioHornblower]

Thanks. So you agree that the TurboTax question is posed incorrectly?

[xmasbaby0]

You are confusing the criteria to file as Head of Household with using the filing status of married filing separately.   You cannot get EIC if you file married filing separately.   Splitting hairs over how long you lived apart will not make you eligible for EIC if you file married filing separately.   There are plenty of people who live together and who file MFS for a variety of reasons.  Married filing separately does not mean you lived apart -- you are not required to live apart to file as MFS.

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

[HoratioHornblower]

thanks for taking the time to weigh in. under current law MFS status is no longer an automatic disqualification for the EIC.

you are correct that the general rule of IRC §32(d)(1) is that a married individual must file a joint return in order to qualify for the EIC. however, under §32(d)(2), a married individual who does not file a joint return for the taxable year is not treated as married, solely for purposes of the EIC, if, among other things, "during the last 6 months of such taxable year, [such individual] does not have the same principal place of abode as the individual's spouse..."

it is my understanding that the spouses must have lived apart for the entire 6-month period. turbotax asks if the spouses had the same principal residence for the last 6 months of 2021, and a "no" answer qualifies the taxpayer for the credit. so, if they lived apart for only 3 of the last six months, the answer to that question would be a legitimate "no" allowing for the credit, but based upon my understanding of the law, the credit should not be allowable.

[BillM223]

Your argument is that the TurboTax question should be rephrased as "Did the spouses have the same principal residence at any time in the last 6 months of 2021?"

Is that correct?

[HoratioHornblower]

• Not quite. The question should read, "Did you live apart from your spouse for the last six months of 2021?" (See Publication 596 - Special rule for separated spouses). A "yes" answer should be required to qualify for the EIC.

[AliciaP1]

Per the IRS EIC qualification assistant on the irs.gov the question is:

Did you and your spouse have the same principal residence for the last 6 months of 2021?

@HoratioHornblower

[HoratioHornblower]

Yes, I was aware of that and that the Turbotax question is identical. Nevertheless that phrasing is inconsistent with both the statute and Publication 596. As I said in an earlier post, if one spouse moved out of the marital residence at any time during the last six months of 2021, the question, as currently phrased, may legitimately be answred "no" which results in the program allowing the credit when it, in fact, is not allowable.