I am not claiming my 20 year old income earning daughter as a dependent, why are full time students earning income from w-2 wages not allowed to apply for EITC?

[xmasbaby0]

If she is 20 and she is a full-time student ---she CAN be claimed as a dependent---so she is supposed to say on her own return that she can be claimed.   Dependents cannot get EIC --- or stimulus money.

https://ttlc.intuit.com/community/dependents/help/when-do-i-have-to-answer-yes-to-being-claimed-as-a...

WHO CAN I CLAIM AS A DEPENDENT?

You can claim a child, relative, friend, or fiancé (etc.) as a dependent on your 2021 taxes as long as they meet the following requirements:

Qualifying child

• They're related to you.
• They aren't claimed as a dependent by someone else.
• They're a U.S. citizen, resident alien, national, or a Canadian or Mexican resident.
• They aren’t filing a joint return with their spouse.
• They're under the age of 19 (or 24 for full-time students).
• No age limit for permanently and totally disabled children.
• They lived with you for more than half the year (exceptions apply).
• They didn't provide more than half of their own support for the year.

Qualifying relative

• They don't have to be related to you (despite the name).
• They aren't claimed as a dependent by someone else.
• They're a U.S. citizen, resident alien, national, or a Canadian or Mexican resident.
• They aren’t filing a joint return with their spouse.
• They lived with you the entire year (exceptions apply).
• They made less than $4,300 in 2021.
• You provided more than half of their financial support

[VolvoGirl]

I have a general Question?  What is a "specified student" on the last 2 points on the EIC qualifications?

https://ttlc.intuit.com/community/credits-and-deductions/help/what-are-the-qualifications-for-the-ea... 

[Mike9241]

if she is supplying more than 1/2 of her support (unusual) then she can not be claimed as a dependent by you. and she should mark her return that she can not be claimed as a dependent. otherwise, she should indicate she's someone else's dependent and you should claim her as a dependent. 

https://apps.irs.gov/app/vita/content/globalmedia/teacher/worksheet_for_determining_support_4012.pdf 

[questioning77]

I think you missed the point of my question, I am NOT claiming my 20 year old as a dependent, she pays for more than half of her living expenses. Why are full time students earning income not allowed to apply for EITC if under the age of 24?

[questioning77]

EXACTLY, so why can she not receive EITC if under the age of 24 and I am NOT claiming her as a dependent?

[KrisD15]

According to the IRS:

"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 18 at the end of the tax year (usually Dec. 31)
  • The minimum age to claim the EIC is generally age 19; however, if you are a qualified former foster youth or a qualified homeless youth, you need to be at least age 18.
  • If you are a specified student (other than a qualified former foster youth or a qualified homeless youth), you need to be at least age 24."

IRS LINK

Specified Student means:

" (C) Specified student For purposes of this paragraph, the term “specified student” means, with respect to any taxable year, an individual who is an eligible student (as defined in section 25A(b)(3) ) during at least 5 calendar months during the taxable year."

Cornell Law Link

[questioning77]

I know all of this, I have looked all of this information up myself.  My question is WHY can she not claim EITC if she is a specified student?  If she is working and paying for more than half of her living expenses AND going to college full-time..why on earth should she not be able to claim EITC?  I would think that it would be more important for a full-time working college student to get EITC than a working part-time student? It makes zero sense, and I want to understand why.  I've already done the research and found all of the relevant documentation that says she can't, but nothing says why.. and it seems pretty illogical to me.  

[DaveF1006]

Here are the rules to claim EITC Without a Qualifying Child per irs.gov. 

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 18 at the end of the tax year (usually Dec. 31)
  • The minimum age to claim the EIC is generally age 19; however, if you are a qualified former foster youth or a qualified homeless youth, you need to be at least age 18.
  • If you are a specified student (other than a qualified former foster youth or a qualified homeless youth), you need to be at least age 24.

She falls in the last point listed. She needs to be at least 24 years old. Since it is part of the tax code, it can't be altered.

[VolvoGirl]

You have to ask Congress why.  They write the rules.    Call your congressman.

[xmasbaby0]

@questioning77 Congress writes the tax laws.   And...you may be all worked up over very little.  The amount of EIC a single person with no dependents could get would be a relatively small amount.  Take a look at the chart that starts on page 33 of the EIC publication.

https://www.irs.gov/pub/irs-pdf/p596.pdf

[questioning77]

I'm not worked up, I just want to better understand. I think it is important to understand why laws are written and the rationale behind them.  Educating myself is important to me, rather than just blindly following things that don't make sense in life. $1400 might not be much to you, but to a 20 year old full-time college student.. it's a hefty chunk of change.

[VolvoGirl]

Whoa!  1,400 is not the EIC.  That is the 3rd Stimulus payment.  You will get that if you are not a dependent.  That is the Recovery Rebate Credit on line 30.

If you were a dependent on a 2020 return but filing independent for 2021 you can get it now and they don't have to pay it back.  So say NO you did not get one because you didn't one, your parents got it.

The 3rd Stimulus payment is really based on 2021.  The IRS just sent the checks out using 2020 to get them out fast.

See IRS Topic B first question

Questions and Answers about the Third Economic Impact Payment — Topic B: Eligibility and Calculation...

[questioning77]

I would hope that anyone that does tax preparation .. ie tax accountants would know the answer to this question. They are probably likely more well versed in tax laws, then say a "congressman" would be.  I was really reaching out for responses from people that should know the answer and thought there may be a few in the "turbo tax" community.

[questioning77]

It is not the stimulus payment. Did you read the chart you just directed me to look at? If the worksheet amount is between 9,150 to 9,200 with zero dependents filing single is an EIC of $1,404 .