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2012 E File

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2012 E File

2012 e file 36. 2012 e file   Earned Income Credit (EIC) Table of Contents What's New Reminders Introduction Useful Items - You may want to see: Do You Qualify for the Credit?If Improper Claim Made in Prior Year Part A. 2012 e file Rules for EveryoneRule 1. 2012 e file Your AGI Must Be Less Than: Rule 2. 2012 e file You Must Have a Valid Social Security Number (SSN) Rule 3. 2012 e file Your Filing Status Cannot Be Married Filing Separately Rule 4. 2012 e file You Must Be a U. 2012 e file S. 2012 e file Citizen or Resident Alien All Year Rule 5. 2012 e file You Cannot File Form 2555 or Form 2555-EZ Rule 6. 2012 e file Your Investment Income Must Be $3,300 or Less Rule 7. 2012 e file You Must Have Earned Income Part B. 2012 e file Rules If You Have a Qualifying ChildRule 8. 2012 e file Your Child Must Meet the Relationship, Age, Residency, and Joint Return Tests Rule 9. 2012 e file Your Qualifying Child Cannot Be Used By More Than One Person To Claim the EIC Rule 10. 2012 e file You Cannot Be a Qualifying Child of Another Taxpayer Part C. 2012 e file Rules If You Do Not Have a Qualifying ChildRule 11. 2012 e file You Must Be at Least Age 25 but Under Age 65 Rule 12. 2012 e file You Cannot Be the Dependent of Another Person Rule 13. 2012 e file You Cannot Be a Qualifying Child of Another Taxpayer Rule 14. 2012 e file You Must Have Lived in the United States More Than Half of the Year Part D. 2012 e file Figuring and Claiming the EICRule 15. 2012 e file Your Earned Income Must Be Less Than: IRS Will Figure the EIC for You How To Figure the EIC Yourself ExamplesExample 1. 2012 e file John and Janet Smith (Form 1040A) Example 2. 2012 e file Kelly Green (Form 1040EZ) What's New Earned income amount is more. 2012 e file  The maximum amount of income you can earn and still get the credit has increased. 2012 e file You may be able to take the credit if: You have three or more qualifying children and you earned less than $46,227 ($51,567 if married filing jointly), You have two qualifying children and you earned less than $43,038 ($48,378 if married filing jointly), You have one qualifying child and you earned less than $37,870 ($43,210 if married filing jointly), or You do not have a qualifying child and you earned less than $14,340 ($19,680 if married filing jointly). 2012 e file Your adjusted gross income also must be less than the amount in the above list that applies to you. 2012 e file For details, see Rules 1 and 15. 2012 e file Investment income amount is more. 2012 e file  The maximum amount of investment income you can have and still get the credit has increased to $3,300. 2012 e file See Rule 6. 2012 e file Reminders Increased EIC on certain joint returns. 2012 e file  A married person filing a joint return may get more EIC than someone with the same income but a different filing status. 2012 e file As a result, the EIC table has different columns for married persons filing jointly than for everyone else. 2012 e file When you look up your EIC in the EIC Table, be sure to use the correct column for your filing status and the number of children you have. 2012 e file Online help. 2012 e file  You can use the EITC Assistant at www. 2012 e file irs. 2012 e file gov/eitc to find out if you are eligible for the credit. 2012 e file The EITC Assistant is available in English and Spanish. 2012 e file EIC questioned by IRS. 2012 e file  The IRS may ask you to provide documents to prove you are entitled to claim the EIC. 2012 e file We will tell you what documents to send us. 2012 e file These may include: birth certificates, school records, medical records, etc. 2012 e file The process of establishing your eligibility will delay your refund. 2012 e file Introduction The earned income credit (EIC) is a tax credit for certain people who work and have less than $51,567 of earned income. 2012 e file A tax credit usually means more money in your pocket. 2012 e file It reduces the amount of tax you owe. 2012 e file The EIC may also give you a refund. 2012 e file How do you get the earned income credit?   To claim the EIC, you must: Qualify by meeting certain rules, and File a tax return, even if you: Do not owe any tax, Did not earn enough money to file a return, or Did not have income taxes withheld from your pay. 2012 e file When you complete your return, you can figure your EIC by using a worksheet in the instructions for Form 1040, Form 1040A, or Form 1040EZ. 2012 e file Or, if you prefer, you can let the IRS figure the credit for you. 2012 e file How will this chapter help you?   This chapter will explain the following. 2012 e file The rules you must meet to qualify for the EIC. 2012 e file How to figure the EIC. 2012 e file Useful Items - You may want to see: Publication 596 Earned Income Credit (EIC) Form (and Instructions) Schedule EIC Earned Income Credit (Qualifying Child Information) 8862 Information To Claim Earned Income Credit After Disallowance Do You Qualify for the Credit? To qualify to claim the EIC, you must first meet all of the rules explained in Part A, Rules for Everyone . 2012 e file Then you must meet the rules in Part B, Rules If You Have a Qualifying Child , or Part C, Rules If You Do Not Have a Qualifying Child . 2012 e file There is one final rule you must meet in Part D, Figuring and Claiming the EIC . 2012 e file You qualify for the credit if you meet all the rules in each part that applies to you. 2012 e file If you have a qualifying child, the rules in Parts A, B, and D apply to you. 2012 e file If you do not have a qualifying child, the rules in Parts A, C, and D apply to you. 2012 e file Table 36-1, Earned Income Credit in a Nutshell. 2012 e file   Use Table 36–1 as a guide to Parts A, B, C, and D. 2012 e file The table is a summary of all the rules in each part. 2012 e file Do you have a qualifying child?   You have a qualifying child only if you have a child who meets the four tests described in Rule 8 and illustrated in Figure 36–1. 2012 e file If Improper Claim Made in Prior Year If your EIC for any year after 1996 was denied or reduced for any reason other than a math or clerical error, you must attach a completed Form 8862 to your next tax return to claim the EIC. 2012 e file You must also qualify to claim the EIC by meeting all the rules described in this chapter. 2012 e file However, if your EIC was denied or reduced as a result of a math or clerical error, do not attach Form 8862 to your next tax return. 2012 e file For example, if your arithmetic is incorrect, the IRS can correct it. 2012 e file If you do not provide a correct social security number, the IRS can deny the EIC. 2012 e file These kinds of errors are called math or clerical errors. 2012 e file If your EIC for any year after 1996 was denied and it was determined that your error was due to reckless or intentional disregard of the EIC rules, then you cannot claim the EIC for the next 2 years. 2012 e file If your error was due to fraud, then you cannot claim the EIC for the next 10 years. 2012 e file More information. 2012 e file   See chapter 5 in Publication 596 for more detailed information about the disallowance period and Form 8862. 2012 e file Part A. 2012 e file Rules for Everyone This part of the chapter discusses Rules 1 through 7. 2012 e file You must meet all seven rules to qualify for the earned income credit. 2012 e file If you do not meet all seven rules, you cannot get the credit and you do not need to read the rest of the chapter. 2012 e file If you meet all seven rules in this part, then read either Part B or Part C (whichever applies) for more rules you must meet. 2012 e file Rule 1. 2012 e file Your AGI Must Be Less Than: $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children, $43,038 ($48,378 for married filing jointly) if you have two qualifying children, $37,870 ($43,210 for married filing jointly) if you have one qualifying child, or $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. 2012 e file Adjusted gross income (AGI). 2012 e file   AGI is the amount on line 38 (Form 1040), line 22 (Form 1040A), or line 4 (Form 1040EZ). 2012 e file If your AGI is equal to or more than the applicable limit listed above, you cannot claim the EIC. 2012 e file Example. 2012 e file Your AGI is $38,550, you are single, and you have one qualifying child. 2012 e file You cannot claim the EIC because your AGI is not less than $37,870. 2012 e file However, if your filing status was married filing jointly, you might be able to claim the EIC because your AGI is less than $43,210. 2012 e file Community property. 2012 e file   If you are married, but qualify to file as head of household under special rules for married taxpayers living apart (see Rule 3 ), and live in a state that has community property laws, your AGI includes that portion of both your and your spouse's wages that you are required to include in gross income. 2012 e file This is different from the community property rules that apply under Rule 7 . 2012 e file Rule 2. 2012 e file You Must Have a Valid Social Security Number (SSN) To claim the EIC, you (and your spouse, if filing a joint return) must have a valid SSN issued by the Social Security Administration (SSA). 2012 e file Any qualifying child listed on Schedule EIC also must have a valid SSN. 2012 e file (See Rule 8 if you have a qualifying child. 2012 e file ) If your social security card (or your spouse's, if filing a joint return) says “Not valid for employment” and your SSN was issued so that you (or your spouse) could get a federally funded benefit, you cannot get the EIC. 2012 e file An example of a federally funded benefit is Medicaid. 2012 e file If you have a card with the legend “Not valid for employment” and your immigration status has changed so that you are now a U. 2012 e file S. 2012 e file citizen or permanent resident, ask the SSA for a new social security card without the legend. 2012 e file U. 2012 e file S. 2012 e file citizen. 2012 e file   If you were a U. 2012 e file S. 2012 e file citizen when you received your SSN, you have a valid SSN. 2012 e file Valid for work only with INS or DHS authorization. 2012 e file   If your social security card reads “Valid for work only with INS authorization” or “Valid for work only with DHS authorization,” you have a valid SSN, but only if that authorization is still valid. 2012 e file SSN missing or incorrect. 2012 e file   If an SSN for you or your spouse is missing from your tax return or is incorrect, you may not get the EIC. 2012 e file Other taxpayer identification number. 2012 e file   You cannot get the EIC if, instead of an SSN, you (or your spouse, if filing a joint return) have an individual taxpayer identification number (ITIN). 2012 e file ITINs are issued by the Internal Revenue Service to noncitizens who cannot get an SSN. 2012 e file No SSN. 2012 e file   If you do not have a valid SSN, put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). 2012 e file You cannot claim the EIC. 2012 e file Getting an SSN. 2012 e file   If you (or your spouse, if filing a joint return) do not have an SSN, you can apply for one by filing Form SS-5, Application for a Social Security Card, with the SSA. 2012 e file You can get Form SS-5 online at www. 2012 e file socialsecurity. 2012 e file gov, from your local SSA office, or by calling the SSA at 1-800-772-1213. 2012 e file Filing deadline approaching and still no SSN. 2012 e file   If the filing deadline is approaching and you still do not have an SSN, you have two choices. 2012 e file Request an automatic 6-month extension of time to file your return. 2012 e file You can get this extension by filing Form 4868, Application for Automatic Extension of Time to File U. 2012 e file S. 2012 e file Individual Income Tax Return. 2012 e file For more information, see chapter 1 . 2012 e file File the return on time without claiming the EIC. 2012 e file After receiving the SSN, file an amended return (Form 1040X, Amended U. 2012 e file S. 2012 e file Individual Income Tax Return) claiming the EIC. 2012 e file Attach a filled-in Schedule EIC if you have a qualifying child. 2012 e file Table 36-1. 2012 e file Earned Income Credit in a Nutshell First, you must meet all the rules in this column. 2012 e file Second, you must meet all the rules in one of these columns, whichever applies. 2012 e file Third, you must meet the rule in this column. 2012 e file Part A. 2012 e file  Rules for Everyone Part B. 2012 e file  Rules If You Have a Qualifying Child Part C. 2012 e file  Rules If You Do Not Have a Qualifying Child Part D. 2012 e file  Figuring and Claiming the EIC 1. 2012 e file Your adjusted gross income (AGI) must be less than: • $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children,  • $43,038 ($48,378 for married filing jointly) if you have two qualifying children,  • $37,870 ($43,210 for married filing jointly) if you have one qualifying child, or   • $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. 2012 e file 2. 2012 e file You must have a valid social security number. 2012 e file  3. 2012 e file Your filing status cannot be “Married filing separately. 2012 e file ” 4. 2012 e file You must be a U. 2012 e file S. 2012 e file citizen or resident alien all year. 2012 e file  5. 2012 e file You cannot file Form 2555 or Form 2555-EZ (relating to foreign earned income). 2012 e file  6. 2012 e file Your investment income must be $3,300 or less. 2012 e file  7. 2012 e file You must have earned income. 2012 e file 8. 2012 e file Your child must meet the relationship, age, residency, and joint return tests. 2012 e file  9. 2012 e file Your qualifying child cannot be used by more than one person to claim the EIC. 2012 e file  10. 2012 e file You cannot be a qualifying child of another person. 2012 e file 11. 2012 e file You must be at least age 25 but under age 65. 2012 e file  12. 2012 e file You cannot be the dependent of another person. 2012 e file  13. 2012 e file You cannot be a qualifying child of another person. 2012 e file  14. 2012 e file You must have lived in the United States more than half of the year. 2012 e file 15. 2012 e file Your earned income must be less than: • $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children,  • $43,038 ($48,378 for married filing jointly) if you have two qualifying children,  • $37,870 ($43,210 for married filing jointly) if you have one qualifying child, or   • $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. 2012 e file Rule 3. 2012 e file Your Filing Status Cannot Be Married Filing Separately If you are married, you usually must file a joint return to claim the EIC. 2012 e file Your filing status cannot be “Married filing separately. 2012 e file ” Spouse did not live with you. 2012 e file   If you are married and your spouse did not live in your home at any time during the last 6 months of the year, you may be able to file as head of household, instead of married filing separately. 2012 e file In that case, you may be able to claim the EIC. 2012 e file For detailed information about filing as head of household, see chapter 2 . 2012 e file Rule 4. 2012 e file You Must Be a U. 2012 e file S. 2012 e file Citizen or Resident Alien All Year If you (or your spouse, if married) were a nonresident alien for any part of the year, you cannot claim the earned income credit unless your filing status is married filing jointly. 2012 e file You can use that filing status only if one spouse is a U. 2012 e file S. 2012 e file citizen or resident alien and you choose to treat the nonresident spouse as a U. 2012 e file S. 2012 e file resident. 2012 e file If you make this choice, you and your spouse are taxed on your worldwide income. 2012 e file If you (or your spouse, if married) were a nonresident alien for any part of the year and your filing status is not married filing jointly, enter “No” on the dotted line next to line 64a (Form 1040) or in the space to the left of line 38a (Form 1040A). 2012 e file If you need more information on making this choice, get Publication 519, U. 2012 e file S. 2012 e file Tax Guide for Aliens. 2012 e file Rule 5. 2012 e file You Cannot File Form 2555 or Form 2555-EZ You cannot claim the earned income credit if you file Form 2555, Foreign Earned Income, or Form 2555-EZ, Foreign Earned Income Exclusion. 2012 e file You file these forms to exclude income earned in foreign countries from your gross income, or to deduct or exclude a foreign housing amount. 2012 e file U. 2012 e file S. 2012 e file possessions are not foreign countries. 2012 e file See Publication 54, Tax Guide for U. 2012 e file S. 2012 e file Citizens and Resident Aliens Abroad, for more detailed information. 2012 e file Rule 6. 2012 e file Your Investment Income Must Be $3,300 or Less You cannot claim the earned income credit unless your investment income is $3,300 or less. 2012 e file If your investment income is more than $3,300, you cannot claim the credit. 2012 e file For most people, investment income is the total of the following amounts. 2012 e file Taxable interest (line 8a of Form 1040 or 1040A). 2012 e file Tax-exempt interest (line 8b of Form 1040 or 1040A). 2012 e file Dividend income (line 9a of Form 1040 or 1040A). 2012 e file Capital gain net income (line 13 of Form 1040, if more than zero, or line 10 of Form 1040A). 2012 e file If you file Form 1040EZ, your investment income is the total of the amount of line 2 and the amount of any tax-exempt interest you wrote to the right of the words “Form 1040EZ” on line 2. 2012 e file However, see Rule 6 in chapter 1 of Publication 596 if: You are filing Schedule E (Form 1040), Form 4797, or Form 8814, or You are reporting income from the rental of personal property on Form 1040, line 21. 2012 e file Rule 7. 2012 e file You Must Have Earned Income This credit is called the “earned income” credit because, to qualify, you must work and have earned income. 2012 e file If you are married and file a joint return, you meet this rule if at least one spouse works and has earned income. 2012 e file If you are an employee, earned income includes all the taxable income you get from your employer. 2012 e file If you are self-employed or a statutory employee, you will figure your earned income on EIC Worksheet B in the instructions for Form 1040. 2012 e file Earned Income Earned income includes all of the following types of income. 2012 e file Wages, salaries, tips, and other taxable employee pay. 2012 e file Employee pay is earned income only if it is taxable. 2012 e file Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. 2012 e file But there is an exception for nontaxable combat pay, which you can choose to include in earned income, as explained below. 2012 e file Net earnings from self-employment. 2012 e file Gross income received as a statutory employee. 2012 e file Wages, salaries, and tips. 2012 e file   Wages, salaries, and tips you receive for working are reported to you on Form W-2, in box 1. 2012 e file You should report these on line 1 (Form 1040EZ) or line 7 (Forms 1040A and 1040). 2012 e file Nontaxable combat pay election. 2012 e file   You can elect to include your nontaxable combat pay in earned income for the earned income credit. 2012 e file Electing to include nontaxable combat pay in earned income may increase or decrease your EIC. 2012 e file Figure the credit with and without your nontaxable combat pay before making the election. 2012 e file   If you make the election, you must include in earned income all nontaxable combat pay you received. 2012 e file If you are filing a joint return and both you and your spouse received nontaxable combat pay, you can each make your own election. 2012 e file In other words, if one of you makes the election, the other one can also make it but does not have to. 2012 e file   The amount of your nontaxable combat pay should be shown in box 12 of your Form W-2 with code “Q. 2012 e file ” Self-employed persons and statutory employees. 2012 e file   If you are self-employed or received income as a statutory employee, you must use the Form 1040 instructions to see if you qualify to get the EIC. 2012 e file Approved Form 4361 or Form 4029 This section is for persons who have an approved: Form 4361, Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science Practitioners, or Form 4029, Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits. 2012 e file Each approved form exempts certain income from social security taxes. 2012 e file Each form is discussed here in terms of what is or is not earned income for the EIC. 2012 e file Form 4361. 2012 e file   Whether or not you have an approved Form 4361, amounts you received for performing ministerial duties as an employee count as earned income. 2012 e file This includes wages, salaries, tips, and other taxable employee compensation. 2012 e file A nontaxable housing allowance or the nontaxable rental value of a home is not earned income. 2012 e file Also, amounts you received for performing ministerial duties, but not as an employee, do not count as earned income. 2012 e file Examples include fees for performing marriages and honoraria for delivering speeches. 2012 e file Form 4029. 2012 e file   Whether or not you have an approved Form 4029, all wages, salaries, tips, and other taxable employee compensation count as earned income. 2012 e file However, amounts you received as a self-employed individual do not count as earned income. 2012 e file Also, in figuring earned income, do not subtract losses on Schedule C, C-EZ, or F from wages on line 7 of Form 1040. 2012 e file Disability Benefits If you retired on disability, taxable benefits you receive under your employer's disability retirement plan are considered earned income until you reach minimum retirement age. 2012 e file Minimum retirement age generally is the earliest age at which you could have received a pension or annuity if you were not disabled. 2012 e file You must report your taxable disability payments on line 7 of either Form 1040 or Form 1040A until you reach minimum retirement age. 2012 e file Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension and are not considered earned income. 2012 e file Report taxable pension payments on Form 1040, lines 16a and 16b (or Form 1040A, lines 12a and 12b). 2012 e file Disability insurance payments. 2012 e file   Payments you received from a disability insurance policy that you paid the premiums for are not earned income. 2012 e file It does not matter whether you have reached minimum retirement age. 2012 e file If this policy is through your employer, the amount may be shown in box 12 of your Form W-2 with code “J. 2012 e file ” Income That Is Not Earned Income Examples of items that are not earned income include interest and dividends, pensions and annuities, social security and railroad retirement benefits (including disability benefits), alimony and child support, welfare benefits, workers' compensation benefits, unemployment compensation (insurance), nontaxable foster care payments, and veterans' benefits, including VA rehabilitation payments. 2012 e file Do not include any of these items in your earned income. 2012 e file Earnings while an inmate. 2012 e file   Amounts received for work performed while an inmate in a penal institution are not earned income when figuring the earned income credit. 2012 e file This includes amounts for work performed while in a work release program or while in a halfway house. 2012 e file Workfare payments. 2012 e file   Nontaxable workfare payments are not earned income for the EIC. 2012 e file These are cash payments certain people receive from a state or local agency that administers public assistance programs funded under the federal Temporary Assistance for Needy Families (TANF) program in return for certain work activities such as (1) work experience activities (including remodeling or repairing public housing) if private sector employment is not available, or (2) community service program activities. 2012 e file Community property. 2012 e file   If you are married, but qualify to file as head of household under special rules for married taxpayers living apart (see Rule 3 ), and live in a state that has community property laws, your earned income for the EIC does not include any amount earned by your spouse that is treated as belonging to you under those laws. 2012 e file That amount is not earned income for the EIC, even though you must include it in your gross income on your income tax return. 2012 e file Your earned income includes the entire amount you earned, even if part of it is treated as belonging to your spouse under your state's community property laws. 2012 e file Nevada, Washington, and California domestic partners. 2012 e file   If you are a registered domestic partner in Nevada, Washington, or California, the same rules apply. 2012 e file Your earned income for the EIC does not include any amount earned by your partner. 2012 e file Your earned income includes the entire amount you earned. 2012 e file For details, see Publication 555. 2012 e file Conservation Reserve Program (CRP) payments. 2012 e file   If you were receiving social security retirement benefits or social security disability benefits at the time you received any CRP payments, your CRP payments are not earned income for the EIC. 2012 e file Nontaxable military pay. 2012 e file   Nontaxable pay for members of the Armed Forces is not considered earned income for the EIC. 2012 e file Examples of nontaxable military pay are combat pay, the Basic Allowance for Housing (BAH), and the Basic Allowance for Subsistence (BAS). 2012 e file See Publication 3, Armed Forces' Tax Guide, for more information. 2012 e file    Combat pay. 2012 e file You can elect to include your nontaxable combat pay in earned income for the EIC. 2012 e file See Nontaxable combat pay election, earlier. 2012 e file Part B. 2012 e file Rules If You Have a Qualifying Child If you have met all of the rules in Part A , read Part B to see if you have a qualifying child. 2012 e file Part B discusses Rules 8 through 10. 2012 e file You must meet all three of these rules, in addition to the rules in Parts A and D , to qualify for the earned income credit with a qualifying child. 2012 e file You must file Form 1040 or Form 1040A to claim the EIC with a qualifying child. 2012 e file (You cannot file Form 1040EZ. 2012 e file ) You also must complete Schedule EIC and attach it to your return. 2012 e file If you meet all the rules in Part A and this part, read Part D to find out what to do next. 2012 e file If you do not meet Rule 8, you do not have a qualifying child. 2012 e file Read Part C to find out if you can get the earned income credit without a qualifying child. 2012 e file Rule 8. 2012 e file Your Child Must Meet the Relationship, Age, Residency, and Joint Return Tests Your child is a qualifying child if your child meets four tests. 2012 e file The four tests are: Relationship, Age, Residency, and Joint return. 2012 e file The four tests are illustrated in Figure 36–1. 2012 e file The paragraphs that follow contain more information about each test. 2012 e file Relationship Test To be your qualifying child, a child must be your: Son, daughter, stepchild, foster child, or a descendant of any of them (for example, your grandchild), or Brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them (for example, your niece or nephew). 2012 e file The following definitions clarify the relationship test. 2012 e file Adopted child. 2012 e file   An adopted child is always treated as your own child. 2012 e file The term “adopted child” includes a child who was lawfully placed with you for legal adoption. 2012 e file Foster child. 2012 e file   For the EIC, a person is your foster child if the child is placed with you by an authorized placement agency or by judgement, decree, or other order of any court of competent jurisdiction. 2012 e file An authorized placement agency includes a state or local government agency. 2012 e file It also includes a tax-exempt organization licensed by a state. 2012 e file In addition, it includes an Indian tribal government or an organization authorized by an Indian tribal government to place Indian children. 2012 e file Example. 2012 e file Debbie, who is 12 years old, was placed in your care 2 years ago by an authorized agency responsible for placing children in foster homes. 2012 e file Debbie is your foster child. 2012 e file Age Test Your child must be: Under age 19 at the end of 2013 and younger than you (or your spouse, if filing jointly), Under age 24 at the end of 2013, a student, and younger than you (or your spouse, if filing jointly), or Permanently and totally disabled at any time during 2013, regardless of age. 2012 e file    The following examples and definitions clarify the age test. 2012 e file Example 1—child not under age 19. 2012 e file Your son turned 19 on December 10. 2012 e file Unless he was permanently and totally disabled or a student, he is not a qualifying child because, at the end of the year, he was not under age 19. 2012 e file Example 2—child not younger than you or your spouse. 2012 e file Your 23-year-old brother, who is a full-time student and unmarried, lives with you and your spouse. 2012 e file He is not disabled. 2012 e file Both you and your spouse are 21 years old and you file a joint return. 2012 e file Your brother is not your qualifying child because he is not younger than you or your spouse. 2012 e file Example 3—child younger than your spouse but not younger than you. 2012 e file The facts are the same as in Example 2 except that your spouse is 25 years old. 2012 e file Because your brother is younger than your spouse, he is your qualifying child even though he is not younger than you. 2012 e file Student defined. 2012 e file   To qualify as a student, your child must be, during some part of each of any 5 calendar months during the calendar year: A full-time student at a school that has a regular teaching staff, course of study, and regular student body at the school, or A student taking a full-time, on-farm training course given by a school described in (1), or a state, county, or local government. 2012 e file The 5 calendar months need not be consecutive. 2012 e file   A full-time student is a student who is enrolled for the number of hours or courses the school considers to be full-time attendance. 2012 e file School defined. 2012 e file   A school can be an elementary school, junior or senior high school, college, university, or technical, trade, or mechanical school. 2012 e file However, on-the-job training courses, correspondence schools, and schools offering courses only through the Internet do not count as schools for the EIC. 2012 e file Vocational high school students. 2012 e file   Students who work in co-op jobs in private industry as a part of a school's regular course of classroom and practical training are considered full-time students. 2012 e file Permanently and totally disabled. 2012 e file   Your child is permanently and totally disabled if both of the following apply. 2012 e file He or she cannot engage in any substantial gainful activity because of a physical or mental condition. 2012 e file A doctor determines the condition has lasted or can be expected to last continuously for at least a year or can lead to death. 2012 e file Residency Test Your child must have lived with you in the United States for more than half of 2013. 2012 e file The following definitions clarify the residency test. 2012 e file United States. 2012 e file   This means the 50 states and the District of Columbia. 2012 e file It does not include Puerto Rico or U. 2012 e file S. 2012 e file possessions such as Guam. 2012 e file Homeless shelter. 2012 e file   Your home can be any location where you regularly live. 2012 e file You do not need a traditional home. 2012 e file For example, if your child lived with you for more than half the year in one or more homeless shelters, your child meets the residency test. 2012 e file Military personnel stationed outside the United States. 2012 e file    U. 2012 e file S. 2012 e file military personnel stationed outside the United States on extended active duty are considered to live in the United States during that duty period for purposes of the EIC. 2012 e file Figure 36-1. 2012 e file Tests for Qualifying Child Please click here for the text description of the image. 2012 e file Qualifying child Extended active duty. 2012 e file   Extended active duty means you are called or ordered to duty for an indefinite period or for a period of more than 90 days. 2012 e file Once you begin serving your extended active duty, you are still considered to have been on extended active duty even if you do not serve more than 90 days. 2012 e file Birth or death of a child. 2012 e file   A child who was born or died in 2013 is treated as having lived with you for more than half of 2013 if your home was the child's home for more than half the time he or she was alive in 2013. 2012 e file Temporary absences. 2012 e file   Count time that you or your child is away from home on a temporary absence due to a special circumstance as time the child lived with you. 2012 e file Examples of a special circumstance include illness, school attendance, business, vacation, military service, and detention in a juvenile facility. 2012 e file Kidnapped child. 2012 e file    A kidnapped child is treated as living with you for more than half of the year if the child lived with you for more than half the part of the year before the date of the kidnapping. 2012 e file The child must be presumed by law enforcement authorities to have been kidnapped by someone who is not a member of your family or your child's family. 2012 e file This treatment applies for all years until the child is returned. 2012 e file However, the last year this treatment can apply is the earlier of: The year there is a determination that the child is dead, or The year the child would have reached age 18. 2012 e file   If your qualifying child has been kidnapped and meets these requirements, enter “KC,” instead of a number, on line 6 of Schedule EIC. 2012 e file Joint Return Test To meet this test, the child cannot file a joint return for the year. 2012 e file Exception. 2012 e file   An exception to the joint return test applies if your child and his or her spouse file a joint return only to claim a refund of income tax withheld or estimated tax paid. 2012 e file Example 1—child files joint return. 2012 e file You supported your 18-year-old daughter, and she lived with you all year while her husband was in the Armed Forces. 2012 e file He earned $25,000 for the year. 2012 e file The couple files a joint return. 2012 e file Because your daughter and her husband filed a joint return, she is not your qualifying child. 2012 e file Example 2—child files joint return only to claim a refund of withheld tax. 2012 e file Your 18-year-old son and his 17-year-old wife had $800 of wages from part-time jobs and no other income. 2012 e file They do not have a child. 2012 e file Neither is required to file a tax return. 2012 e file Taxes were taken out of their pay, so they filed a joint return only to get a refund of the withheld taxes. 2012 e file The exception to the joint return test applies, so your son may be your qualifying child if all the other tests are met. 2012 e file Example 3—child files joint return to claim American opportunity credit. 2012 e file The facts are the same as in Example 2 except no taxes were taken out of your son's pay. 2012 e file He and his wife are not required to file a tax return, but they file a joint return to claim an American opportunity credit of $124 and get a refund of that amount. 2012 e file Because claiming the American opportunity credit is their reason for filing the return, they are not filing it only to get a refund of income tax withheld or estimated tax paid. 2012 e file The exception to the joint return test does not apply, so your son is not your qualifying child. 2012 e file Married child. 2012 e file   Even if your child does not file a joint return, if your child was married at the end of the year, he or she cannot be your qualifying child unless: You can claim an exemption for the child, or The reason you cannot claim an exemption for the child is that you let the child's other parent claim the exemption under the Special rule for divorced or separated parents (or parents who live apart) , described later. 2012 e file Social security number. 2012 e file   The qualifying child must have a valid social security number (SSN) unless the child was born and died in 2013 and you attach to your return a copy of the child's birth certificate, death certificate, or hospital records showing a live birth. 2012 e file You cannot claim the EIC on the basis of a qualifying child if: The qualifying child's SSN is missing from your tax return or is incorrect, The qualifying child's social security card says “Not valid for employment” and was issued for use in getting a federally funded benefit, or Instead of an SSN, the qualifying child has: An individual taxpayer identification number (ITIN), which is issued to a noncitizen who cannot get an SSN, or An adoption taxpayer identification number (ATIN), which is issued to adopting parents who cannot get an SSN for the child being adopted until the adoption is final. 2012 e file   If you have more than one qualifying child and only one has a valid SSN, you can use only that child to claim the EIC. 2012 e file For more information about SSNs, see Rule 2 . 2012 e file Rule 9. 2012 e file Your Qualifying Child Cannot Be Used By More Than One Person To Claim the EIC Sometimes a child meets the tests to be a qualifying child of more than one person. 2012 e file However, only one of these persons can actually treat the child as a qualifying child. 2012 e file Only that person can use the child as a qualifying child to take all of the following tax benefits (provided the person is eligible for each benefit). 2012 e file The exemption for the child. 2012 e file The child tax credit. 2012 e file Head of household filing status. 2012 e file The credit for child and dependent care expenses. 2012 e file The exclusion for dependent care benefits. 2012 e file The EIC. 2012 e file The other person cannot take any of these benefits based on this qualifying child. 2012 e file In other words, you and the other person cannot agree to divide these tax benefits between you. 2012 e file The other person cannot take any of these tax benefits unless he or she has a different qualifying child. 2012 e file The tiebreaker rules explained next explain who, if anyone, can claim the EIC when more than one person has the same qualifying child. 2012 e file However, the tiebreaker rules do not apply if the other person is your spouse and you file a joint return. 2012 e file Tiebreaker rules. 2012 e file   To determine which person can treat the child as a qualifying child to claim the six tax benefits just listed, the following tiebreaker rules apply. 2012 e file If only one of the persons is the child's parent, the child is treated as the qualifying child of the parent. 2012 e file If the parents file a joint return together and can claim the child as a qualifying child, the child is treated as the qualifying child of the parents. 2012 e file If the parents do not file a joint return together but both parents claim the child as a qualifying child, the IRS will treat the child as the qualifying child of the parent with whom the child lived for the longer period of time during the year. 2012 e file If the child lived with each parent for the same amount of time, the IRS will treat the child as the qualifying child of the parent who had the higher adjusted gross income (AGI) for the year. 2012 e file If no parent can claim the child as a qualifying child, the child is treated as the qualifying child of the person who had the highest AGI for the year. 2012 e file If a parent can claim the child as a qualifying child but no parent does so claim the child, the child is treated as the qualifying child of the person who had the highest AGI for the year, but only if that person's AGI is higher than the highest AGI of any of the child's parents who can claim the child. 2012 e file If the child's parents file a joint return with each other, this rule can be applied by treating the parents' total AGI as divided evenly between them. 2012 e file See Example 8 . 2012 e file   Subject to these tiebreaker rules, you and the other person may be able to choose which of you claims the child as a qualifying child. 2012 e file See Examples 1 through 13 . 2012 e file   If you cannot claim the EIC because your qualifying child is treated under the tiebreaker rules as the qualifying child of another person for 2013, you may be able to take the EIC using a different qualifying child, but you cannot take the EIC using the rules in Part C for people who do not have a qualifying child. 2012 e file If the other person cannot claim the EIC. 2012 e file   If you and someone else have the same qualifying child but the other person cannot claim the EIC because he or she is not eligible or his or her earned income or AGI is too high, you may be able to treat the child as a qualifying child. 2012 e file See Examples 6 and 7 . 2012 e file But you cannot treat the child as a qualifying child to claim the EIC if the other person uses the child to claim any of the other six tax benefits listed earlier. 2012 e file Examples. 2012 e file The following examples may help you in determining whether you can claim the EIC when you and someone else have the same qualifying child. 2012 e file Example 1. 2012 e file You and your 2-year-old son Jimmy lived with your mother all year. 2012 e file You are 25 years old, unmarried, and your AGI is $9,000. 2012 e file Your only income was $9,000 from a part-time job. 2012 e file Your mother's only income was $20,000 from her job, and her AGI is $20,000. 2012 e file Jimmy's father did not live with you or Jimmy. 2012 e file The special rule explained later for divorced or separated parents (or parents who live apart) does not apply. 2012 e file Jimmy is a qualifying child of both you and your mother because he meets the relationship, age, residency, and joint return tests for both you and your mother. 2012 e file However, only one of you can treat him as a qualifying child to claim the EIC (and the other tax benefits listed earlier for which that person qualifies). 2012 e file He is not a qualifying child of anyone else, including his father. 2012 e file If you do not claim Jimmy as a qualifying child for the EIC or any of the other tax benefits listed earlier, your mother can treat him as a qualifying child to claim the EIC (and any of the other tax benefits listed earlier for which she qualifies). 2012 e file Example 2. 2012 e file The facts are the same as in Example 1 except your AGI is $25,000. 2012 e file Because your mother's AGI is not higher than yours, she cannot claim Jimmy as a qualifying child. 2012 e file Only you can claim him. 2012 e file Example 3. 2012 e file The facts are the same as in Example 1 except that you and your mother both claim Jimmy as a qualifying child. 2012 e file In this case, you as the child's parent will be the only one allowed to claim Jimmy as a qualifying child for the EIC and the other tax benefits listed earlier for which you qualify. 2012 e file The IRS will disallow your mother's claim to the EIC and any of the other tax benefits listed earlier unless she has another qualifying child. 2012 e file Example 4. 2012 e file The facts are the same as in Example 1 except that you also have two other young children who are qualifying children of both you and your mother. 2012 e file Only one of you can claim each child. 2012 e file However, if your mother's AGI is higher than yours, you can allow your mother to claim one or more of the children. 2012 e file For example, if you claim one child, your mother can claim the other two. 2012 e file Example 5. 2012 e file The facts are the same as in Example 1 except that you are only 18 years old. 2012 e file This means you are a qualifying child of your mother. 2012 e file Because of Rule 10 , discussed next, you cannot claim the EIC and cannot claim Jimmy as a qualifying child. 2012 e file Only your mother may be able to treat Jimmy as a qualifying child to claim the EIC. 2012 e file If your mother meets all the other requirements for claiming the EIC and you do not claim Jimmy as a qualifying child for any of the other tax benefits listed earlier, your mother can claim both you and Jimmy as qualifying children for the EIC. 2012 e file Example 6. 2012 e file The facts are the same as in Example 1 except that your mother earned $50,000 from her job. 2012 e file Because your mother's earned income is too high for her to claim the EIC, only you can claim the EIC using your son. 2012 e file Example 7. 2012 e file The facts are the same as in Example 1 except that you earned $50,000 from your job and your AGI is $50,500. 2012 e file Your earned income is too high for you to claim the EIC. 2012 e file But your mother cannot claim the EIC either, because her AGI is not higher than yours. 2012 e file Example 8. 2012 e file The facts are the same as in Example 1 except that you and Jimmy's father are married to each other, live with Jimmy and your mother, and have an AGI of $30,000 on a joint return. 2012 e file If you and your husband do not claim Jimmy as a qualifying child for the EIC or any of the other tax benefits listed earlier, your mother can claim him instead. 2012 e file Even though the AGI on your joint return, $30,000, is more than your mother's AGI of $20,000, for this purpose half of the joint AGI can be treated as yours and half as your husband's. 2012 e file In other words, each parent's AGI can be treated as $15,000. 2012 e file Example 9. 2012 e file You, your husband, and your 10-year-old son Joey lived together until August 1, 2013, when your husband moved out of the household. 2012 e file In August and September, Joey lived with you. 2012 e file For the rest of the year, Joey lived with your husband, who is Joey's father. 2012 e file Joey is a qualifying child of both you and your husband because he lived with each of you for more than half the year and because he met the relationship, age, and joint return tests for both of you. 2012 e file At the end of the year, you and your husband still were not divorced, legally separated, or separated under a written separation agreement, so the special rule for divorced or separated parents (or parents who live apart) does not apply. 2012 e file You and your husband will file separate returns. 2012 e file Your husband agrees to let you treat Joey as a qualifying child. 2012 e file This means, if your husband does not claim Joey as a qualifying child for any of the tax benefits listed earlier, you can claim him as a qualifying child for any tax benefit listed earlier for which you qualify. 2012 e file However, your filing status is married filing separately, so you cannot claim the EIC or the credit for child and dependent care expenses. 2012 e file See Rule 3 . 2012 e file Example 10. 2012 e file The facts are the same as in Example 9 except that you and your husband both claim Joey as a qualifying child. 2012 e file In this case, only your husband will be allowed to treat Joey as a qualifying child. 2012 e file This is because, during 2013, the boy lived with him longer than with you. 2012 e file You cannot claim the EIC (either with or without a qualifying child). 2012 e file However, your husband's filing status is married filing separately, so he cannot claim the EIC or the credit for child and dependent care expenses. 2012 e file See Rule 3 . 2012 e file Example 11. 2012 e file You, your 5-year-old son and your son's father lived together all year. 2012 e file You and your son's father are not married. 2012 e file Your son is a qualifying child of both you and his father because he meets the relationship, age, residency, and joint return tests for both you and his father. 2012 e file Your earned income and AGI are $12,000, and your son's father's earned income and AGI are $14,000. 2012 e file Neither of you had any other income. 2012 e file Your son's father agrees to let you treat the child as a qualifying child. 2012 e file This means, if your son's father does not claim your son as a qualifying child for the EIC or any of the other tax benefits listed earlier, you can claim him as a qualifying child for the EIC and any of the other tax benefits listed earlier for which you qualify. 2012 e file Example 12. 2012 e file The facts are the same as in Example 11 except that you and your son's father both claim your son as a qualifying child. 2012 e file In this case, only your son's father will be allowed to treat your son as a qualifying child. 2012 e file This is because his AGI, $14,000, is more than your AGI, $12,000. 2012 e file You cannot claim the EIC (either with or without a qualifying child). 2012 e file Example 13. 2012 e file You and your 7-year-old niece, your sister's child, lived with your mother all year. 2012 e file You are 25 years old, and your AGI is $9,300. 2012 e file Your only income was from a part-time job. 2012 e file Your mother's AGI is $15,000. 2012 e file Her only income was from her job. 2012 e file Your niece's parents file jointly, have an AGI of less than $9,000, and do not live with you or their child. 2012 e file Your niece is a qualifying child of both you and your mother because she meets the relationship, age, residency, and joint return tests for both you and your mother. 2012 e file However, only your mother can treat her as a qualifying child. 2012 e file This is because your mother's AGI, $15,000, is more than your AGI, $9,300. 2012 e file Special rule for divorced or separated parents (or parents who live apart). 2012 e file   A child will be treated as the qualifying child of his or her noncustodial parent (for purposes of claiming an exemption and the child tax credit, but not for the EIC) if all of the following statements are true. 2012 e file The parents: Are divorced or legally separated under a decree of divorce or separate maintenance, Are separated under a written separation agreement, or Lived apart at all times during the last 6 months of 2013, whether or not they are or were married. 2012 e file The child received over half of his or her support for the year from the parents. 2012 e file The child is in the custody of one or both parents for more than half of 2013. 2012 e file Either of the following statements is true. 2012 e file The custodial parent signs Form 8332 or a substantially similar statement that he or she will not claim the child as a dependent for the year, and the noncustodial parent attaches the form or statement to his or her return. 2012 e file If the divorce decree or separation agreement went into effect after 1984 and before 2009, the noncustodial parent may be able to attach certain pages from the decree or agreement instead of Form 8332. 2012 e file A pre-1985 decree of divorce or separate maintenance or written separation agreement that applies to 2013 provides that the noncustodial parent can claim the child as a dependent, and the noncustodial parent provides at least $600 for support of the child during 2013. 2012 e file  For details, see chapter 3. 2012 e file Also see Applying Rule 9 to divorced or separated parents (or parents who live apart) , next. 2012 e file Applying Rule 9 to divorced or separated parents (or parents who live apart). 2012 e file   If a child is treated as the qualifying child of the noncustodial parent under the special rule just described for children of divorced or separated parents (or parents who live apart), only the noncustodial parent can claim an exemption and the child tax credit for the child. 2012 e file However, the custodial parent, if eligible, or another eligible taxpayer can claim the child as a qualifying child for the EIC and other tax benefits listed earlier in this chapter. 2012 e file If the child is the qualifying child of more than one person for these benefits, then the tiebreaker rules determine which person can treat the child as a qualifying child. 2012 e file Example 1. 2012 e file You and your 5-year-old son lived all year with your mother, who paid the entire cost of keeping up the home. 2012 e file Your AGI is $10,000. 2012 e file Your mother’s AGI is $25,000. 2012 e file Your son's father did not live with you or your son. 2012 e file Under the special rule for children of divorced or separated parents (or parents who live apart), your son is treated as the qualifying child of his father, who can claim an exemption and the child tax credit for the child. 2012 e file However, your son's father cannot claim your son as a qualifying child for head of household filing status, the credit for child and dependent care expenses, the exclusion for dependent care benefits, or the EIC. 2012 e file You and your mother did not have any child care expenses or dependent care benefits. 2012 e file If you do not claim your son as a qualifying child, your mother can claim him as a qualifying child for the EIC and head of household filing status, if she qualifies for these tax benefits. 2012 e file Example 2. 2012 e file The facts are the same as in Example 1 except that your AGI is $25,000 and your mother's AGI is $21,000. 2012 e file Your mother cannot claim your son as a qualifying child for any purpose because her AGI is not higher than yours. 2012 e file Example 3. 2012 e file The facts are the same as in Example 1 except that you and your mother both claim your son as a qualifying child for the EIC. 2012 e file Your mother also claims him as a qualifying child for head of household filing status. 2012 e file You as the child's parent will be the only one allowed to claim your son as a qualifying child for the EIC. 2012 e file The IRS will disallow your mother's claim to the EIC and head of household filing status unless she has another qualifying child. 2012 e file Rule 10. 2012 e file You Cannot Be a Qualifying Child of Another Taxpayer You are a qualifying child of another taxpayer (your parent, guardian, foster parent, etc. 2012 e file ) if all of the following statements are true. 2012 e file You are that person's son, daughter, stepchild, foster child, or a descendant of any of them. 2012 e file Or, you are that person's brother, sister, half brother, half sister, stepbrother, or stepsister (or a descendant of any of them). 2012 e file You were: Under age 19 at the end of the year and younger than that person (or that person's spouse, if the person files jointly), Under age 24 at the end of the year, a student, and younger than that person (or that person's spouse, if the person files jointly), or Permanently and totally disabled, regardless of age. 2012 e file You lived with that person in the United States for more than half of the year. 2012 e file You are not filing a joint return for the year (or are filing a joint return only to claim a refund of withheld income tax or estimated tax paid). 2012 e file For more details about the tests to be a qualifying child, see Rule 8 . 2012 e file If you are a qualifying child of another taxpayer, you cannot claim the EIC. 2012 e file This is true even if the person for whom you are a qualifying child does not claim the EIC or meet all of the rules to claim the EIC. 2012 e file Put “No” beside line 64a (Form 1040) or line 38a (Form 1040A). 2012 e file Example. 2012 e file You and your daughter lived with your mother all year. 2012 e file You are 22 years old, unmarried, and attended a trade school full time. 2012 e file You had a part-time job and earned $5,700. 2012 e file You had no other income. 2012 e file Because you meet the relationship, age, residency, and joint return tests, you are a qualifying child of your mother. 2012 e file She can claim the EIC if she meets all the other requirements. 2012 e file Because you are your mother's qualifying child, you cannot claim the EIC. 2012 e file This is so even if your mother cannot or does not claim the EIC. 2012 e file Child of person not required to file a return. 2012 e file   You are not the qualifying child of another taxpayer (and so may qualify to claim the EIC) if the person for whom you meet the relationship, age, residency, and joint return tests is not required to file an income tax return and either: Does not file an income tax return, or Files a return only to get a refund of income tax withheld or estimated tax paid. 2012 e file Example. 2012 e file The facts are the same as in the last example except your mother had no gross income, is not required to file a 2013 tax return, and does not file a 2013 tax return. 2012 e file As a result, you are not your mother's qualifying child. 2012 e file You can claim the EIC if you meet all the other requirements to do so. 2012 e file   See Rule 10 in Publication 596 for additional examples. 2012 e file Part C. 2012 e file Rules If You Do Not Have a Qualifying Child Read this part if you: Do not have a qualifying child, and Have met all the rules in Part A . 2012 e file  Part C discusses Rules 11 through 14. 2012 e file You must meet all four of these rules, in addition to the rules in Parts A and D , to qualify for the earned income credit without a qualifying child. 2012 e file If you have a qualifying child, the rules in this part do not apply to you. 2012 e file You can claim the credit only if you meet all the rules in Parts A, B, and D. 2012 e file See Rule 8 to find out if you have a qualifying child. 2012 e file Rule 11. 2012 e file You Must Be at Least Age 25 but Under Age 65 You must be at least age 25 but under age 65 at the end of 2013. 2012 e file If you are married filing a joint return, either you or your spouse must be at least age 25 but under age 65 at the end of 2013. 2012 e file It does not matter which spouse meets the age test, as long as one of the spouses does. 2012 e file You meet the age test if you were born after December 31, 1948, and before January 2, 1989. 2012 e file If you are married filing a joint return, you meet the age test if either you or your spouse was born after December 31, 1948, and before January 2, 1989. 2012 e file If neither you nor your spouse meets the age test, you cannot claim the EIC. 2012 e file Put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). 2012 e file Death of spouse. 2012 e file   If you are filing a joint return with your spouse who died in 2013, you meet the age test if your spouse was at least age 25 but under age 65 at the time of death. 2012 e file Example 1. 2012 e file You are age 28 and unmarried. 2012 e file You meet the age test. 2012 e file Example 2—spouse meets age test. 2012 e file You are married and filing a joint return. 2012 e file You are age 23 and your spouse is age 27. 2012 e file You meet the age test because your spouse is at least age 25 but under age 65. 2012 e file Example 3—spouse dies in 2013. 2012 e file You are married and filing a joint return with your spouse who died in August 2013. 2012 e file You are age 67. 2012 e file Your spouse would have become age 65 in November 2013. 2012 e file Because your spouse was under age 65 when she died, you meet the age test. 2012 e file Rule 12. 2012 e file You Cannot Be the Dependent of Another Person If you are not filing a joint return, you meet this rule if: You checked box 6a on Form 1040 or 1040A, or You did not check the “You” box on line 5 of Form 1040EZ, and you entered $10,000 on that line. 2012 e file If you are filing a joint return, you meet this rule if: You checked both box 6a and box 6b on Form 1040 or 1040A, or You and your spouse did not check either the “You” box or the “Spouse” box on line 5 of Form 1040EZ, and you entered $20,000 on that line. 2012 e file If you are not sure whether someone else can claim you (or your spouse, if filing a joint return) as a dependent, read the rules for claiming a dependent in chapter 3. 2012 e file If someone else can claim you (or your spouse, if filing a joint return) as a dependent on his or her return, but does not, you still cannot claim the credit. 2012 e file Example 1. 2012 e file In 2013, you were age 25, single, and living at home with your parents. 2012 e file You worked and were not a student. 2012 e file You earned $7,500. 2012 e file Your parents cannot claim you as a dependent. 2012 e file When you file your return, you claim an exemption for yourself by not checking the “You” box on line 5 of your Form 1040EZ and by entering $10,000 on that line. 2012 e file You meet this rule. 2012 e file You can claim the EIC if you meet all the other requirements. 2012 e file Example 2. 2012 e file The facts are the same as in Example 1 , except that you earned $2,000. 2012 e file Your parents can claim you as a dependent but decide not to. 2012 e file You do not meet this rule. 2012 e file You cannot claim the credit because your parents could have claimed you as a dependent. 2012 e file Joint returns. 2012 e file   You generally cannot be claimed as a dependent by another person if you are married and file a joint return. 2012 e file   However, another person may be able to claim you as a dependent if you and your spouse file a joint return only to get a refund of income tax withheld or estimated tax paid. 2012 e file But neither you nor your spouse can be claimed as a dependent by another person if you claim the EIC on your joint return. 2012 e file Example 1. 2012 e file You are 26 years old. 2012 e file You and your wife live with your parents and had $800 of wages from part-time jobs and no other income. 2012 e file Neither you nor your wife is required to file a tax return. 2012 e file You do not have a child. 2012 e file Taxes were taken out of your pay, so you file a joint return only to get a refund of the withheld taxes. 2012 e file Your parents are not disqualified from claiming an exemption for you just because you filed a joint return. 2012 e file They can claim exemptions for you and your wife if all the other tests to do so are met. 2012 e file Example 2. 2012 e file The facts are the same as in Example 1 except no taxes were taken out of your pay. 2012 e file Also, you and your wife are not required to file a tax return, but you file a joint return to claim an EIC of $63 and get a refund of that amount. 2012 e file Because claiming the EIC is your reason for filing the return, you are not filing it only to get a refund of income tax withheld or estimated tax paid. 2012 e file Your parents cannot claim an exemption for either you or your wife. 2012 e file Rule 13. 2012 e file You Cannot Be a Qualifying Child of Another Taxpayer You are a qualifying child of another taxpayer (your parent, guardian, foster parent, etc. 2012 e file ) if all of the following statements are true. 2012 e file You are that person's son, daughter, stepchild, foster child, or a descendant of any of them. 2012 e file Or, you are that person's brother, sister, half brother, half sister, stepbrother, or stepsister (or a descendant of any of them). 2012 e file You were: Under age 19 at the end of the year and younger than that person (or that person's spouse, if the person files jointly), Under age 24 at the end of the year, a student (as defined in Rule 8 ), and younger than that person (or that person's spouse, if the person files jointly), or Permanently and totally disabled, regardless of age. 2012 e file You lived with that person in the United States for more than half of the year. 2012 e file You are not filing a joint return for the year (or are filing a joint return only to claim a refund of withheld income tax or estimated tax paid). 2012 e file For more details about the tests to be a qualifying child, see Rule 8 . 2012 e file If you are a qualifying child of another taxpayer, you cannot claim the EIC. 2012 e file This is true even if the person for whom you are a qualifying child does not claim the EIC or meet all of the rules to claim the EIC. 2012 e file Put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). 2012 e file Example. 2012 e file You lived with your mother all year. 2012 e file You are age 26, unmarried, and permanently and totally disabled. 2012 e file Your only income was from a community center where you went three days a week to answer telephones. 2012 e file You earned $5,000 for the year and provided more than half of your own support. 2012 e file Because you meet the relationship, age, residency, and joint return tests, you are a qualifying child of your mother for the EIC. 2012 e file She can claim the EIC if she meets all the other requirements. 2012 e file Because you are a qualifying child of your mother, you cannot claim the EIC. 2012 e file This is so even if your mother cannot or does not claim the EIC. 2012 e file Joint returns. 2012 e file   You generally cannot be a qualifying child of another taxpayer if you are married and file a joint return. 2012 e file   However, you may be a qualifying child of another taxpayer if you and your spouse file a joint return for the year only to get a refund of income tax withheld or estimated tax paid. 2012 e file But neither you nor your spouse can be a qualifying child of another taxpayer if you claim the EIC on your joint return. 2012 e file Child of person not required to file a return. 2012 e file   You are not the qualifying child of another taxpayer (and so may qualify to claim the EIC) if the person for whom you meet the relationship, age, residency, and joint return tests is not required to file an income tax return and either: Does not file an income tax return, or Files a return only to get a refund of income tax withheld or estimated tax paid. 2012 e file Example. 2012 e file You lived all year with your father. 2012 e file You are 27 years old, unmarried, permanently and totally disabled, and earned $13,000. 2012 e file You have no other income, no children, and provided more than half of your own support. 2012 e file Your father had no gross income, is not required to file a 2013 tax return, and does not file a 2013 tax return. 2012 e file As a result, you are not your father's qualifying child. 2012 e file You can claim the EIC if you meet all the other requirements to do so. 2012 e file   See Rule 13 in Publication 596 for additional examples. 2012 e file Rule 14. 2012 e file You Must Have Lived in the United States More Than Half of the Year Your home (and your spouse's, if filing a joint return) must have been in the United States for more than half the year. 2012 e file If it was not, put “No” next to line 64a (Form 1040), line 38a (Form 1040A), or line 8a (Form 1040EZ). 2012 e file United States. 2012 e file   This means the 50 states and the District of Columbia. 2012 e file It does not include Puerto Rico or U. 2012 e file S. 2012 e file possessions such as Guam. 2012 e file Homeless shelter. 2012 e file   Your home can be any location where you regularly live. 2012 e file You do not need a traditional home. 2012 e file If you lived in one or more homeless shelters in the United States for more than half the year, you meet this rule. 2012 e file Military personnel stationed outside the United States. 2012 e file   U. 2012 e file S. 2012 e file military personnel stationed outside the United States on extended active duty (defined in Rule 8 ) are considered to live in the United States during that duty period for purposes of the EIC. 2012 e file Part D. 2012 e file Figuring and Claiming the EIC Read this part if you have met all the rules in Parts A and B, or all the rules in Parts A and C. 2012 e file Part D discusses Rule 15 . 2012 e file You must meet this rule, in addition to the rules in Parts A and B , or Parts A and C , to qualify for the earned income credit. 2012 e file This part of the chapter also explains how to figure the amount of your credit. 2012 e file You have two choices. 2012 e file Have the IRS figure the EIC for you. 2012 e file If you want to do this, see IRS Will Figure the EIC for You . 2012 e file Figure the EIC yourself. 2012 e file If you want to do this, see How To Figure the EIC Yourself . 2012 e file Rule 15. 2012 e file Your Earned Income Must Be Less Than: $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children, $43,038 ($48,378 for married filing jointly) if you have two qualifying children, $37,870 ($43,210 for married filing jointly) if you have one qualifying child, or $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child. 2012 e file Earned income generally means wages, salaries, tips, other taxable employee pay, and net earnings from self-employment. 2012 e file Employee pay is earned income only if it is taxable. 2012 e file Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. 2012 e file But there is an exception for nontaxable combat pay, which you can choose to include in earned income. 2012 e file Earned income is explained in detail in Rule 7 . 2012 e file Figuring earned income. 2012 e file   If you are self-employed, a statutory employee, or a member of the clergy or a church employee who files Schedule SE (Form 1040), you will figure your earned income when you fill out Part 4 of EIC Worksheet B in the Form 1040 instructions. 2012 e file   Otherwise, figure your earned income by using the worksheet in Step 5 of the Form 1040 instructions for lines 64a and 64b or the Form 1040A instructions for lines 38a and 38b, or the worksheet in Step 2 of the Form 1040EZ instructions for lines 8a and 8b. 2012 e file   When using one of those worksheets to figure your earned income, you will start with the amount on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ). 2012 e file You will then reduce that amount by any amount included on that line and described in the following list: Scholarship or fellowship grants not reported on a Form W-2, Inmate's income, and Pension or annuity from deferred compensation plans. 2012 e file Scholarship or fellowship grants not reported on a Form W-2. 2012 e file   A scholarship or fellowship grant that was not reported to you on a Form W-2 is not considered earned income for the earned income credit. 2012 e file Inmate's income. 2012 e file   Amounts received for work performed while an inmate in a penal institution are not earned income for the earned income credit. 2012 e file This includes amounts received for work performed while in a work release program or while in a halfway house. 2012 e file If you received any amount for work done while an inmate in a penal institution and that amount is included in the total on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ), put “PRI” and the amount on the dotted line next to line 7 (Form 1040), in the space to the left of the entry space for line 7 (Form 1040A), or in the space to the left of line 1 (Form 1040EZ). 2012 e file Pension or annuity from deferred compensation plans. 2012 e file   A pension or annuity from a nonqualified deferred compensation plan or a nongovernmental section 457 plan is not considered earned income for the earned income credit. 2012 e file If you received such an amount and it was included in the total on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ), put “DFC” and the amount on the dotted line next to line 7 (Form 1040), in the space to the left of the entry space for line 7 (Form 1040A), or in the space to the left of line 1 (Form 1040EZ). 2012 e file This amount may be reported in box 11 of your Form W-2. 2012 e file If you received such an amount but box 11 is blank, contact your employer for the amount received as a pension or annuity. 2012 e file Clergy. 2012 e file   If you are a member of the clergy who files Schedule SE and the amount on line 2 of that schedule includes an amount that was also reported on line 7 (Form 1040), subtract that amount from the amount on line 7 (Form 1040) and enter the result in the first space of the worksheet in Step 5 of the Form 1040 instructions for lines 64a and 64b. 2012 e file Put “Clergy” on the dotted line next to line 64a (Form 1040). 2012 e file Church employees. 2012 e file    A church employee means an employee (other than a minister or member of a religious order) of a church or qualified church-controlled organization that is exempt from employer social security and Medicare taxes. 2012 e file If you received wages as a
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Tax Relief for Victims of Freedom and Noble Wildfires in Oklahoma

OK-2012-09, Aug. 23, 2012

Updated 9/27/2012 to include Noble Wildfire and include Cleveland County.

OKLAHOMA CITY — Victims of the Freedom and Noble Wildfires that began on Aug. 3, 2012, in parts of Oklahoma may qualify for tax relief from the Internal Revenue Service.

The President has declared Creek and Cleveland counties a federal disaster area. Individuals who reside or have a business in these counties may qualify for tax relief.

The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after Aug. 3, and on or before Oct. 2, have been postponed to Oct. 2, 2012. This includes the quarterly estimated tax payment due on Sept. 17, 2012.

In addition, the IRS is waiving the failure-to-deposit penalties for employment and excise tax deposits due on or after Aug. 3, and on or before Aug. 20, as long as the deposits are made by Aug. 20, 2012.

If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing, payment or deposit due date, including an extended filing or payment due date, that falls within the postponement period.

The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief. But affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at 1-866-562-5227 to request this tax relief.

Covered Disaster Area

The counties listed above constitute a covered disaster area for purposes of Treas. Reg. § 301.7508A-1(d)(2) and is entitled to the relief detailed below.

Affected Taxpayers

Taxpayers considered to be affected taxpayers eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts are those taxpayers listed in Treas. Reg. § 301.7508A-1(d)(1), and include individuals who live, and businesses whose principal place of business is located, in the covered disaster area. Taxpayers not in the covered disaster area, but whose records necessary to meet a deadline listed in Treas. Reg. § 301.7508A-1(c) are in the covered disaster area, are also entitled to relief. In addition, all relief workers affiliated with a recognized government or philanthropic organization assisting in the relief activities in the covered disaster area and any individual visiting the covered disaster area who was killed or injured as a result of the disaster are entitled to relief.

Grant of Relief

Under section 7508A, the IRS gives affected taxpayers until Oct. 2 to file most tax returns (including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after Aug. 3 and on or before Oct. 2.

The IRS also gives affected taxpayers until Oct. 2 to perform other time-sensitive actions described in Treas. Reg. § 301.7508A-1(c)(1) and Rev. Proc. 2007-56, 2007-34 I.R.B. 388 (Aug. 20, 2007), that are due to be performed on or after Aug. 3 and on or before Oct. 2.

This relief also includes the filing of Form 5500 series returns, in the manner described in section 8 of Rev. Proc. 2007-56. The relief described in section 17 of Rev. Proc. 2007-56, pertaining to like-kind exchanges of property, also applies to certain taxpayers who are not otherwise affected taxpayers and may include acts required to be performed before or after the period above.

The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise tax deposits due on or after Aug. 3 and on or before Aug. 20 provided the taxpayer makes these deposits by Aug. 20.

Casualty Losses

Affected taxpayers in a federally declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year. Claiming the loss on an original or amended return for last year will get the taxpayer an earlier refund, but waiting to claim the loss on this year’s return could result in a greater tax saving, depending on other income factors.

Individuals may deduct personal property losses that are not covered by insurance or other reimbursements. For details, see Form 4684 and its instructions.

Affected taxpayers claiming the disaster loss on last year’s return should put the Disaster Designation “OKLAHOMA/FREEDOM WILDFIRE” or "OKLAHOMA/NOBLE WILDFIRE" at the top of the form so that the IRS can expedite the processing of the refund.

Other Relief

The IRS will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers. Taxpayers should put the assigned Disaster Designation in red ink at the top of Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, as appropriate, and submit it to the IRS.

Affected taxpayers who are contacted by the IRS on a collection or examination matter should explain how the disaster impacts them so that the IRS can provide appropriate consideration to their case.

Taxpayers may download forms and publications from the official IRS website, IRS.gov, or order them by calling 1-800-TAX-FORM (1-800-829-3676). The IRS toll-free number for general tax questions is 1-800-829-1040.

Page Last Reviewed or Updated: 14-Aug-2013

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