qualified child or relative, HOH, dependent, EIC

[schirallicpa]

2 clients share same household.

The woman has 2 children - they are not his.

The man has 50K income.

The woman has 10K income.

In the past, he filed HOH, and did not claim any dependents.

And she filed single, with dependents, took child credit, and EIC.

First of all - I don't think that that was right - because if they lived in the same home, then I believe EIC should have been based on his income.

Any way - of course thats the way they want to file this year.

Now - if he's filing HOH and no dependents, he must list child's SS# up there in that section now. (Can't remember if you had to before>) Well "RED FLAG". That kid is on someone else's return as a dependent and EIC kid...... See my dilema.

I can't see how they can get EIC.

Can he claim a kid as a dependent under qualifying relative rules, and at least take some credits on his return? And she takes the other.

I hate EIC. I live in poor Western NY where the EIC game has been played to the limits, and I am so darned sick and tired of it.

Any suggestions today will be helpful.

Thank you.

[Don in Upstate NY]

2 clients share same household. The woman has 2 children - they are not his. The man has 50K income. The woman has 10K income. In the past, he filed HOH, and did not claim any dependents. And she filed single, with dependents, took child credit, and EIC. First of all - I don't think that that was right - because if they lived in the same home, then I believe EIC should have been based on his income.

Any way - of course thats the way they want to file this year. Now - if he's filing HOH and no dependents, he must list child's SS# up there in that section now. (Can't remember if you had to before>) Well "RED FLAG". That kid is on someone else's return as a dependent and EIC kid...... See my dilema. I can't see how they can get EIC.

Can he claim a kid as a dependent under qualifying relative rules, and at least take some credits on his return? And she takes the other. I hate EIC. I live in poor Western NY where the EIC game has been played to the limits, and I am so darned sick and tired of it.

It's quite simple. The mother made $10K. Therefore she MUST file a tax return. Therefore she is a "taxpayer". She has her natural children living with her for over six months of the year. Therefore they are her qualifying children. Therefore they cannot be anyone else's qualifying relatives. Making only $10K it is unreasonable to assume that she is paying over half the cost to support the household.

She files single with two qualifying children. At $10K she has no tax liability, but gets EIC.

He has neither qualifying children or qualifying relatives who are dependents. He files single with no dependents.

[kcjenkins]

I agree that in a case such as this, it is morally wrong that she gets EIC while he supports the kids. But yes, it does work that way, because the code allows it. You've always had to put the non-dependent who qualifies him for HOH on his return. and it will not cause a red flag, the IRS does not care. This is one of those cases where the tax code makes it that much less likely that they will marry, and give the kids a stable legitimate family. But it's a very popular thing, these days.

[Don in Upstate NY]

You've always had to put the non-dependent who qualifies him for HOH on his return. and it will not cause a red flag, the IRS does not care.

But since the only non-dependent who can qualify you as head-of-household is a qualifying child, that doesn't apply in this case.

[joelgilb]

I agree that in a case such as this, it is morally wrong that she gets EIC while he supports the kids. But yes, it does work that way, because the code allows it. You've always had to put the non-dependent who qualifies him for HOH on his return. and it will not cause a red flag, the IRS does not care. This is one of those cases where the tax code makes it that much less likely that they will marry, and give the kids a stable legitimate family. But it's a very popular thing, these days.

Since when has there aver been any morality in our tax code. Or our other laws for that matter.

It is which Senator or House Representative can convince our other politicians we need another stupid law!