You must have a qualifying child or have income below certain thresholds to qualify for the EIC, in addition to meeting other criteria.
Below are the requirements for a someone to be considered a qualifying child:
Dependent taxpayer test: The taxpayer, or spouse of the taxpayer if filing jointly, cannot be eligible to be claimed as a dependent on someone else’s tax return.
Married Filing Jointly test: If you file a joint return with your spouse, you cannot be treated as a dependent. (This rule does not apply if the joint return was filed only as a claim for refund and no tax liability would exist for either spouse if they had filed separate returns).
Citizen or resident test: The person claimed as a dependent must be either a U.S. citizen, U.S. national, U.S. resident alien, or a resident of Canada or Mexico. An adopted child that lived with the taxpayer all year passes this test if the taxpayer is a U.S. citizen or U.S. national.
Qualifying Child
In addition to the above, you must be able to answer "yes" to all of the following questions to claim an exemption for your child.
Relationship test: The child must be the taxpayer’s son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half brother, half sister, or a descendant of any of these, such as the taxpayer’s grandchild, niece, or nephew.
Residency test: The child must have lived with the taxpayer for more than half of 2019.
- Temporary absences (e.g., school, vacation, business, medical care, military services, or detention in a juvenile facility) are considered as time living with the taxpayer.
- Exceptions apply under the rules for children of divorced or separated parents. See IRS Publication 501 for details.
Age test: The child must be
• Under age 19 at the end of the tax year and younger than the taxpayer (or spouse), or
• Under age 24 at the end of 2019, a full-time student for any part of five calendar months during the tax year, and younger than the taxpayer (or spouse), or
• Permanently and totally disabled at any age
Support Test: The child cannot have provided more than 1/2 of his/her own support during the tax year. Welfare, TANF, and scholarships received by the child are not considered support.
Next, you must meet the below criteria to claim the credit:
- The greater of the taxpayer's 2019 adjusted gross income (AGI) or earned income must be less than:
- $50,162 if the taxpayer has three or more qualifying children ($55,952 for Married Filing Jointly (MFJ) taxpayers
- $46,703 if the taxpayer has two qualifying children ($52,493 for MFJ)
- $41,094 if the taxpayer has one qualifying child ($46,884 for MFJ)
- $15,570 ($21,370 for MFJ) if the taxpayer does not have a qualifying child
- The taxpayer (and spouse if MFJ) and any qualifying children must have a valid Social Security Number unless the child was born and died during the year. A Social Security card that says "Not Valid for Employment" is not considered valid for EIC. Further, adoption taxpayer identification numbers (ATIN) or individual taxpayer identification numbers (ITIN) are not valid for EIC.
- The taxpayer's status cannot be Married Filing Separately (MFS).
- The taxpayer must be a US citizen or resident alien all year.
- The taxpayer cannot file Form 2555 (Foreign Earned Income).
- The taxpayer's investment income must be $3600 or less.
The taxpayer must have earned income. Earned income includes:
- Wages, salaries, tips, and other taxable employee pay
- Disability pay (benefits reported on a W-2 and paid under an employer's plan before a taxpayer reaches minimum retirement age)
- Self-employment income (net profits reduced by the deduction for 1/2 of SE tax)
- Combat pay (if an election is made, all nontaxable combat pay can be included in earned income)
The following forms of income are not earned income:
- Interest and dividends
- Pensions and annuities
- Social Security and railroad retirement benefits
- Alimony and child support
- Welfare benefits
- Workers' compensation
- Unemployment compensation
- Veterans' benefits
- Nontaxable workfare or foster care payments
- Nontaxable combat pay (unless taxpayer elects to include it in earned income for EIC purposes)
- Community property income of spouse (in community property states), if taxpayer files as Head of Household (HOH)
For the EIC, a child can only be claimed by one taxpayer. In cases where a child meets the qualifying child requirements for more than one taxpayer, the tiebreaker rules must be applied.
- Parent vs. Parent: The parents can choose, but only one parent can actually claim the child.
- Parent vs. Nonparent: Parent claims the child.
- Parent vs. Nonparent (but neither parent claims the child): Nonparent claims the child if the nonparent's AGI is higher than any of the parents.
- Nonparent vs. nonparent: Taxpayer with the highest AGI claims the child.
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