Claiming EIC 2008/2009

[Lucho]

One of my clients referred a family to me; I trying to figure out the correct way for them to file 2008 and 2009.

The scenario is as follows:

The couple has 4children ages: 21, 19, 13 and 7.

For 2008 and 2009 the couple (mom/dad) made little income and they just need to file those years to claim a little refund for both years (no dependents claimed)

The 19 has a 2008 W- 2 with income close to 10,000; will file as single not claiming any dependent too; she also has 2009 W-2 and a 1099 –Misc. and will file same status as 2008.

Now, the boy 21 has W-2s from 2008 and 2009 with compensation of 19,000+and 21,000+respectively.

Reading the instructions 1040/2008-2009 about EIC and CTC, I feel confident that the 21 year old son can file as HOH claiming as dependents his 7 years old brother and his 13 years old sister to claim the EIC and CTC.

I need to mention that all this family live in the same house.

I would like to read your comments on this topic to help me go ahead on this and if I am wrong I will appreciate your guidance.

I am leaving to church at this moment and will back as soon as the preacher dismisses the congregation.

May God bless this forum and all his members

Lucho

[Terry D EA]

The number one question I would have for the son trying to claim EIC and CTC for his brother and sister would be if he meets the support test. How much was mom and dad's "little income"? By your post, it would seem the son had the higher income.

[David1980]

The number one question I would have for the son trying to claim EIC and CTC for his brother and sister would be if he meets the support test. How much was mom and dad's "little income"? By your post, it would seem the son had the higher income.

What difference would it make if the parents paid 100% of the brother/sister's support or if the son paid 100% of his siblings support?

[Pacun]

The parents can claim EIC for the 19 (if full time student), 13 and 7 year old as long as non of them provided more than 50% of their own support. This will be true even if the 21 year old child supported them.

The 21 year old can claim EIC for all 3 siblings provided that he provided he provided more than 50% of his own support. Provided that the 19 old sibling is a full time student and non of the siblings provided more than 50% of their own support. This will hold true even if parents supported the children.

If the 19 year old is not a full time student and if he provided more than 50% of his own support, he/she can claim the two little siblings and get EIC, AGAIN, provided that non of the little sibblings didn't provide more than 50% of their own support.

For the 21 year old, you should make sure that non of his dependent siblings provided more than 50% for their own support and you should be able to see if he qualifies for HH.

Remember that the 21 or 19 year old can claim HH ONLY if he provided more than 50% for any of the siblings and they kept the home which was the main home for the siblings.

This is from the top of my head and I will be interested if someone has a different opinion.

[Janitor Bob]

Would fair rental value of the house be considered in figuring support? If so, you would need to know who owns the house and factor that amount in for support for everybody else living there.

[Lucho]

Thank you to all of you for your post. It really helps.

One poster states that the boy 21 can also claim The 19 year old sister; the girl 19 W-2 shows $10,000, and that is 50% of what his older brother made and that make me think that it can be a problem for her brother 21 to proove he provided more than 50% of her support.

Thank you again.

Lucho

[Pacun]

Thank you to all of you for your post. It really helps.

One poster states that the boy 21 can also claim The 19 year old sister; the girl 19 W-2 shows $10,000, and that is 50% of what his older brother made and that make me think that it can be a problem for her brother 21 to proove he provided more than 50% of her support.

Thank you again.

Lucho

You are correct but using another reasoning.

For the parents, that wouldn't be a problem if the 19 daughter was a full time student AND she didn't provide more than 50% for her own support.

Your are right, the 21 year old will have a problem because he couldn't claim her as dependent because she made too much money, period. This is true, regardless what percentage her income represents when compared to his income AND regardless if he supported her more than 50%. She made too much money to be claimed by anyone else other than her parent with the conditions stated above.

[Terry D EA]

What difference would it make if the parents paid 100% of the brother/sister's support or if the son paid 100% of his siblings support?

I was looking for the same information as others. If the son paid for more than 50% of the support for the qualifyiing children, then the qualifying children couldn't have paid more than half of their own support. Next question was the parents do they have the higher AGI? By the original post, one would assume not. However, assuming is not part of the questioning process.

The next snafu is can he claim head of household. While all other tests appear to be met, did he indeed pay for half of the upkeep of the home? JB has a good question about fair rental value being considered when calculating support. If he paid that amount in some manner whether that was towards the mortgage or rental of the home. Pacun's explanation is the best. These things are complicated with each and every case having its own set of quirks.