EITC Tax Preparer Toolkit
2009 Qualifying Child
Scenario 2
Due Diligence –
Know the law. Ask the right questions. Get all the facts.
Scenario
Mike wishes to have his
taxes prepared. He
informs you:
•
He is single.
•
18 years old.
•
Has W-2 wages of
$12,750.
•
His sister lives with him
and he wants to claim
EITC.
Take 1
You ask:
Did anyone else live in the house with you and your
sister?
He says:
Our mother lived with us.
You ask:
How many months did your sister live with you?
He says:
The three of us lived together all year.
You ask: How old is your sister?
He says:
She’s 21.
You ask:
Is she a full-time student?
He says:
She’s a full-time college student.
Does Mike Qualify for EITC?
Mike and his sister are both qualifying
children of their mother and because
he is a qualifying child of another
individual, he cannot claim EITC.
Take 2
You ask:
Did anyone else live in the house with you and your
sister?
He says:
No.
You ask:
How many months did your sister live with you?
He says:
My sister and I lived together all year.
You ask:
How old is your sister?
He says:
She’s 21.
You ask:
Is your sister a full time student?
He says:
Yes.
You ask:
Is your sister disabled?
He says:
No, she’s not disabled.
Does Mike Qualify for EITC?
Although his sister meets the relationship and
residency requirements, she is not the qualifying child
of Mike because she is older. Changes to the Uniform
Definition of a Child effective for tax year 2009 require
the taxpayer claiming the child be older than the
qualifying child unless the child is permanently
disabled.
Take 3
You ask: Did anyone else live in the house with you and your sister?
He says: No.
You ask: How many months did your sister live with you?
He says: We lived together all year.
You ask: How old is your sister?
He says: She’s 21.
You ask: Is your sister a full time student?
He says: No.
You ask: Is your sister disabled?
He says: Yes, she has Cerebral Palsy.
You ask: How long has she had this disability?
He says: Since birth.
You ask: Can she hold a job?
He says: No.
You ask: How much money did your sister’s parents earn last year?
He says: Our parents are deceased.
Does Mike Qualify for EITC?
Yes, Mike’s sister meets the relationship, age and
residency requirements.
•
Although she is older than Mike, she is considered
permanently disabled because:
•
She cannot engage in any substantial gainful
activity because of a physical or mental
condition.
•
A doctor determined the condition has lasted or
can be expected to last continuously for at
least a year or can lead to death.
•
Because the parents are deceased, you don’t have
to compare Mike’s adjusted gross income to his
parents--
•
Sec. 501 allows a taxpayer other than the
parents of a qualifying child to claim that child,
only if the adjusted gross income of the
taxpayer is higher than the highest adjusted
gross income of any parent of the child.
