i have a question about EIC taxes?

Question

I normally claim my child i just had a baby in july. but i just started to work in october so if i claim the earned income credit it wont be that much will it maybe $1000 or not even that. My estimated income for the year will only be about 2700 with $315 fed income tax withheld. But my brother has been working all year can i let him claim him and let him claim the Earned Income Credit. His income will be about $10000 give or take with maybe $300-$400 fed taxes withheld.

Will they allow him to claim them and the EIC, what will the estimated EIC be????

i have a 3 year old and a 4 month old

Answer 1

For the EIC, a person can claim a child only if either (a) the child lived with the person claiming the child for more than half of the tax year, or (b) the child lived with the person claiming the child for the entire time the child was alive during the year (for the baby, this would from when it was born until the end of the year; for the other child, this would be the entire year). Whichever of you did not meet this criteria cannot claim the child(ren). For example, if the baby lived with you and not your brother at any time from its birth to the end of the year, then your brother cannot claim the baby for the EIC.

Answer 2

The support provided or not provided by your brother for the child has nothing to do with the Earned Income Credit.

Your brother cannot be claimed as a dependent on anyone else's return for him to claim a dependent.

As long as your brother has lived with the child for over half the year (for the older child), OR since the birth of the baby (for the baby), and no one else in the household, nor the other parent, claims the child, then your brother may claim his niece or nephew on his tax return (one or both children). He would then get a larger EIC than you would get given his income.

For an income of $10,000 with one child, the EIC is $2,747 and $4010 for two children. These are 2006 figures, they will be slightly higher for 2007. He will get all or most of his withholding back as well if he has one or two dependents.

Answer 3

If you and your baby are living with your brother and he's supporting you and your child or children, then possibly. Otherwise no, and don't even think about trying it, the IRS has started checking closer into EIC claims, and if you and he are found to be making fraudulent EIC claims you'd not only have to pay back the money, but would be banned from eligibility for EIC for a number of years.

Answer 4

See publication 501 table 5 on page 10, as Judy stated it might be possible for your brother to claim your children but they have to be his qualifying children. See qualifying children rule 5.

This means that if you and your children lived with your brother and met the other tests in table 5 then he could claim the children for the following benefits; dependants, child tax credit, child care credit, earned income credit, and head of household filing status. If you decide to do this then you have to follow king Solomon’s rule (you can’t split the baby). In other words if he claims them for anything you can claim them for nothing, see page 12. Example 1 on page 12 describes this situation, just substitute brother for mother.

Here is an estimate of your refund if this applies.
Yours:
EIC for 2 children $1090 plus your withholding

Brother:
EIC for 2 children $ 3990 plus withholding

If you qualify for this don’t be surprised if the IRS holds up your brothers EIC until he proves that these children are his qualifying children.

Answer 5

No dependent and EIC belong to you.