EIC or not?

Question

Im preparing my best friends taxes online using Turbo Tax and I ran into some news. I was wondering if you could tell me if she qualifies for EIC...She is 20, Single, (non HOH), and has 1 dependant (son 2 yrs old), from entering all of her W-2s she had a combined income of about 19000 including some unemployment, but she didnt pay much into her withholdings, therefore I thought she would owe some but by claiming her son as a dependant she was given the Std $1000 deduction, thus she was given a refund of 549. Later in the questionaire EIC came into play and using the simple tool provided she qualifies and her sone qualifies...Is this true...the software gave me some numbers and it looked like a refund of $2120. Does this sound about right? Is it the 549 or 2120? What special papers are needed for her to used the EIC (if needed).

She is not the Head of Household, she lives with her mom (pays rent to her), but cannot be claimed as a dependant to her mom, because she has a child.

Answer 1

It does sound right to me because Earned Income Credit is to help tax payers that are low income---and your best friend's AGI of $19,000 falls into the guidelines of claiming EIC--maximum income of $30,338 with one qualifying child. If you are filing online, it should automatically figure it for you based on the information you put in---you don't need any special forms to fill out to claim it. You sound like you are doing everything right and the online tax preparation services are pretty accurate as long as you enter the correct information, so you should feel pretty confident about that. :)

Answer 2

here in Texas it sure sounds right to me...my daughters both claim Head of Household and they also get EIC for the first 2 children. i also think 2120 sounds right or it could be a little more and i do not believe there is any special paper work she needs in order for her to get the EIC. it should be on the Turbo Tax form you are filling out for her.

Answer 3

From what you have posted she should file as Head of Household. If she provided a home for her child and paid more than half of the cost of providing the home she qualifies as HoH. The rent that she pays her mother for the portion of the home that she and her child occupy covers the cost of "their" home 100% so there shouldn't be any question that she's eligible for HoH filing status. As long as her mother isn't claiming either her or her child as a dependent there are no issues with her HoH status or the EITC.

The on-line software will generate the necessary forms and will do the calculations.

Answer 4

Just follow the interview on TurboTax and you will be fine. The refund of $2,120 sounds correct.

The Head of Household filing status has nothing to do with Earned Income Credit.

Answer 5

if she provided a home for her son and worked even part time to support him during the year, yes, she qualifies for EIC. does she qualify as head of household? or does she live with her parents? is she claimed by her parents as a dependent? are they claiming her son as a dependent? are you doing her taxes without looking at the tax guides? you need to read those guidelines so you don't enter the wrong information, because the IRS doesn't catch those sometimes for years, and when they do, they add thousands of dollars in fines and interest.

Answer 6

The refund of $2,120 sounds right since she is eligible for the EIC and also the child tax credit. She needs to attach Form EIC (below) to her tax return if filing by mail.

http://www.irs.gov/pub/irs-pdf/f1040sei.pdf