Frequently Asked Questions on U.S. Earned Tax Credits

Frequently Asked Questions on U.S. Earned Tax Credits

If the custodial parent releases a claim to exemption for a child by signing a Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent, or a substantially similar statement, may the noncustodial parent claim the child as a qualifying child for the earned income credit?
 
Answer:
No, the noncustodial parent may not claim a child as a qualifying child for the earned income credit based solely on the custodial parent's release of a claim to exemption for the child.

The custodial parent may still be able to claim the child as a qualifying child for the earned income credit if the residency test and all the other requirements are met.
Note: The custodial parent is generally the parent with whom the child lives for the greater number of nights during the year. The noncustodial parent is the other parent. If the child was with each parent for an equal number of nights, the custodial parent is the parent with the higher adjusted gross income. For details and an exception for a parent who works at night, see Publication 501, Dependents, Standard Deduction and Filing Information.

Additional Information:
Publication 596, Earned Income Credit (EIC)
Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent (PDF)
Use the EITC Assistant
Subcategory:
Qualifying Child Rules
Category:
Earned Income Tax Credit
Must I be entitled to claim a child as a dependent to claim the earned income credit based on the child being my qualifying child?
 
Answer:
Generally, you don't have to be entitled to claim the child as a dependent to claim the earned income credit based on the child being your qualifying child, because the support test for qualifying child as a dependent does not apply for the earned income credit. However, if your qualifying child was married at the end of your tax year, generally, he or she can't be your qualifying child unless you meet one of the following conditions:

You're entitled to claim the child as a dependent, or
The reason you're not entitled to claim the child as a dependent is that you released a claim to a dependency exemption for the child under the special rule for divorced or separated parents or parents who live apart
Additional Information:
Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent (PDF)
Use the EITC Assistant
Publication 596, Earned Income Credit (EIC)
Subcategory:
Qualifying Child Rules
Category:
Earned Income Tax Credit
Is child support considered earned income when calculating the earned income credit?
 
Answer:
No, for purposes of calculating the earned income credit, child support isn't considered earned income.

Examples of items that aren't 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. Don't include any of these items in your earned income.

Additional Information:
Publication 596, Earned Income Credit (EIC)
Use the EITC Assistant
Subcategory:
Taxable & Nontaxable Income
Category:
Earned Income Tax Credit
If both parents who were never married want to claim the earned income credit, which parent is entitled to claim the credit as an eligible individual with a qualifying child?
 
Answer:
If they otherwise meet all of the requirements to claim the earned income tax credit (EITC), unmarried parents with a qualifying child may choose which parent will claim the qualifying child for the EITC.

If there are two qualifying children, each parent may claim the credit based on one child.
One parent may claim the credit based on both children.
If both parents claim the same qualifying child for the EITC, but don't file a joint return together, the IRS will apply tie-breaker rules and treat the child as the qualifying child of the parent with whom the child lives for the longer amount of time in the tax year. If the child lives with each parent for the same amount of time, the IRS will treat the child as the qualifying child of the parent who has the higher adjusted gross income (AGI) for the tax year.
There are instances where neither parent can claim the child as a qualifying child, and some other person is entitled to claim the child as a qualifying child for purposes of the EITC. In instances where some other person or persons may claim the child as a qualifying child for purposes of the EITC:

If no parent can claim the child as a qualifying child, the child is treated as the qualifying child of the person who has the highest AGI for the tax year.
If a parent can claim the child as a qualifying child but neither parent claims the child, the child is treated as the qualifying child of the person who has the highest AGI, but only if that person's AGI is higher than the AGI of any of the child's parents who can claim the child as a qualifying child.
Additional Information:
Publication 596, Earned Income Credit (EIC)
Use the EITC Assistant
Subcategory:
Other EITC Issues
Category:
Earned Income Tax Credit
My child was born and only lived 40 minutes. Can this child be my qualifying child for the earned income credit and the child tax credit?
 
Answer:
Yes, if you meet the requirements, you may claim:

1. The Earned Income Credit

Generally, a child must live with you in the United States for more than half of the tax year to be a qualifying child. You may treat a child who was born alive or died in 2022 as having lived with you for more than half of 2022 if your main home was the child’s main home (or would have been) for more than half of the time he or she was alive in 2022. Whether your child was born alive depends on state law.

The earned income credit requires that you provide a valid social security number (SSN) for your qualifying child. If you meet all of the other requirements to claim this credit, and your child was born and died in 2022 and didn't have an SSN, instead of an SSN, you may enter "DIED" on line 2 of Schedule EIC (Form 1040), Earned Income Credit and attach a copy of the child's birth certificate, death certificate, or a hospital medical record showing a live birth. Beginning with the 2021 tax year, singles and couples who have SSNs can claim the credit, even if your children don't have SSNs. In this instance, you may be eligible for the earned income credit available to childless workers.

   2. Dependency and/or Child Tax Credit 

Generally, the child must live with you for more than half of the tax year to be a qualifying child. You may treat a child who was born alive or died in 2022 as having lived with you for more than half of 2022 if your main home was (or would have been) the child's main home for more than half of the time he or she was alive in 2022. Whether your child was born alive depends on state law.

If you meet all of the other requirements to claim the child as a dependent, you usually must provide a taxpayer identifying number (TIN) for the child. If your child was born and died in 2022 and didn't have an SSN or other TIN, instead of a TIN, you may enter "DIED" in column 2 of the Dependents section of Form 1040, U.S. Individual Income Tax Return or Form 1040-SR, U.S. Tax Return for Seniors and attach a copy of the child's birth certificate, death certificate, or a hospital record showing a live birth.

The child tax credit requires that you provide a valid SSN for your qualifying child. If you meet all of the other requirements to claim this credit and your child was born and died in 2022 and didn’t have an SSN, instead of an SSN, you may enter “DIED” on column 2 of the Dependents section of Form 1040 or Form 1040-SR and attach a copy of the child’s birth certificate, death certificate or a hospital record showing a live birth.

Additional Information:
Publication 501, Dependents, Standard Deduction and Filing Information
Publication 596, Earned Income Credit (EIC)
Does My Child/Dependent Qualify for the Child Tax Credit or the Credit for Other Dependents?
Whom May I Claim as a Dependent?
Use the EITC Assistant
Schedule 8812 (Form 1040), Credits for Qualifying Children and Other Dependents
Subcategory:
Qualifying Child Rules
Category:
Earned Income Tax Credit