What Is the Income for Earned Income Credit: A Comprehensive Guide?

The Earned Income Credit (EIC) is a valuable tax break for eligible individuals and families with low to moderate income. Understanding what is the income for the Earned Income Credit is crucial for maximizing your tax benefits and securing financial stability through strategic partnerships; explore how income-partners.net can guide you to increase your earnings. This guide will provide a detailed explanation of earned income, eligibility requirements, and how to calculate the credit.

1. What Is the Earned Income Credit (EIC)?

The Earned Income Credit (EIC) is a refundable tax credit in the United States designed to benefit low-to-moderate-income working individuals and families. Understanding the intricacies of the EIC, including eligibility requirements, income thresholds, and calculation methods, is essential for maximizing its benefits. Let’s delve into various aspects of the EIC.

1.1. Definition and Purpose

The Earned Income Credit (EIC), also known as the Earned Income Tax Credit (EITC), serves as a crucial financial aid for eligible low-to-moderate-income individuals and families. By reducing the amount of tax owed and potentially providing a refund, the EIC aims to supplement earnings, alleviate poverty, and encourage workforce participation.

The purpose of the EIC is multifaceted:

Poverty Reduction: It provides a financial boost to families and individuals struggling to make ends meet, lifting many out of poverty.
Workforce Incentive: It encourages people to enter or remain in the workforce by rewarding their labor with a tax benefit.
Economic Stimulus: By increasing disposable income, the EIC can stimulate local economies as recipients spend their refunds on necessities and other goods.
Tax Fairness: It provides a form of tax relief to those who may not benefit as much from other tax breaks, ensuring a fairer tax system.

1.2. Who Is Eligible for the EIC?

Eligibility for the EIC depends on several factors, including income, filing status, and whether you have qualifying children. Here are the key criteria:

Earned Income: You must have earned income, such as wages, salaries, tips, or net earnings from self-employment.
Adjusted Gross Income (AGI): Your AGI must be below certain limits, which vary depending on your filing status and the number of qualifying children you have.
Filing Status: You must file as single, head of household, qualifying widow(er), or married filing jointly. You cannot claim the EIC if you file as married filing separately.
Qualifying Child (if applicable): If you have a qualifying child, they must meet certain age, residency, and relationship requirements.
Residency: You must live in the United States for more than half the tax year.
Social Security Number: You, your spouse (if filing jointly), and any qualifying children must have a valid Social Security number.
Investment Income: Your investment income must be $11,600 or less for the tax year 2024.

1.3. Income Limits and Credit Amounts

The income limits and credit amounts for the EIC vary each year and depend on your filing status and the number of qualifying children you have. Here are the income limits and maximum credit amounts for the tax year 2024:

Children or relatives claimed	Filing as single, head of household, married filing separately or widowed	Filing as married filing jointly	Maximum Credit
Zero	$18,591	$25,511	$632
One	$49,084	$56,004	$4,213
Two	$55,768	$62,688	$6,960
Three	$59,899	$66,819	$7,830

Investment income limit: $11,600 or less

1.4. Understanding “Earned Income”

Earned income is a critical component of EIC eligibility. It includes:

Wages, Salaries, and Tips: Taxable income received as an employee.
Self-Employment Income: Net earnings from operating a business or farm.
Other Taxable Compensation: Such as union strike benefits and certain disability payments received before retirement age.
Gig Economy Work: Income from freelance, temporary, or on-demand jobs, such as driving for ride-sharing services, delivering food, or providing creative services.

Earned income does not include:

Interest and Dividends
Pensions and Annuities
Social Security Benefits
Unemployment Benefits
Alimony
Child Support
Pay received for work performed while incarcerated

1.5. How to Claim the EIC

To claim the EIC, you must file a tax return and complete Schedule EIC (Form 1040), Earned Income Credit. You’ll need to provide information about your earned income, filing status, and any qualifying children. The IRS provides resources and tools to help you determine your eligibility and calculate the amount of the credit.

1.6. Common Mistakes to Avoid

Claiming the EIC can be straightforward, but avoiding common mistakes is essential to ensure accurate filing and prevent delays or audits. Some common errors include:

Incorrectly Reporting Income: Ensure all earned income is accurately reported on your tax return.
Misunderstanding Qualifying Child Rules: Make sure your child meets all the requirements for age, residency, and relationship.
Filing with Incorrect Status: You must file as single, head of household, qualifying widow(er), or married filing jointly to claim the EIC.
Overlooking Investment Income Limit: Investment income exceeding the limit can disqualify you from claiming the EIC.
Not Filing Schedule EIC: This form is required to claim the credit and must be completed accurately.

1.7. Additional Resources

IRS Website: The IRS provides detailed information, publications, and tools to help you understand and claim the EIC.
Tax Preparation Software: Many tax software programs guide you through the process of claiming the EIC and ensure you meet all the requirements.
Volunteer Income Tax Assistance (VITA): VITA offers free tax help to people who generally make $60,000 or less, persons with disabilities, and taxpayers who have limited English language skills.
Tax Counseling for the Elderly (TCE): TCE provides free tax help for all taxpayers, particularly those who are 60 and older, specializing in questions about pensions and retirement-related issues.

Understanding the intricacies of the Earned Income Tax Credit (EITC) to help maximize tax refunds for eligible individuals and families.

2. What Qualifies as Earned Income for the Earned Income Credit (EIC)?

Earned income is the cornerstone of EIC eligibility. It includes all taxable income and wages you receive from working for someone else, yourself, or from a business or farm you own. Let’s explore the specific types of income that qualify and those that do not.

2.1. Types of Earned Income

The following types of income are generally considered earned income for the purposes of the EIC:

Wages, Salary, and Tips: This includes all taxable income reported in Box 1 of Form W-2, where federal income taxes are withheld.
Self-Employment Income: If you own or operate a business or farm, your net earnings from self-employment are considered earned income. This includes income reported on Schedule C (Form 1040), Profit or Loss From Business, or Schedule F (Form 1040), Profit or Loss From Farming.
Gig Economy Income: Income earned from freelance, temporary, or on-demand jobs, such as driving for ride-sharing services, delivering food, or providing creative services. This income is often reported on Form 1099-NEC.
Union Strike Benefits: Benefits received from a union during a strike are considered earned income.
Certain Disability Benefits: Disability benefits you receive before reaching the minimum retirement age can qualify as earned income.
Nontaxable Combat Pay: Nontaxable combat pay reported in Box 12 of Form W-2 with code Q is also considered earned income.
Statutory Employee Income: If you are a statutory employee, your income is considered earned income. Statutory employees include certain agent-drivers, commission drivers, life insurance salespersons, and home workers.

2.2. Types of Income That Do Not Qualify as Earned Income

It’s equally important to know what types of income do not qualify as earned income for the EIC:

Interest and Dividends: Income from investments, such as interest earned on savings accounts and dividends from stocks, does not qualify.
Pensions and Annuities: Payments received from pensions and annuities are not considered earned income.
Social Security Benefits: Social Security retirement, disability, and survivor benefits do not qualify.
Unemployment Benefits: Payments received from unemployment insurance are not considered earned income.
Alimony: Alimony payments are not considered earned income.
Child Support: Payments received for child support are not considered earned income.
Pay for Work Performed While Incarcerated: Income received for work performed while you were an inmate in a penal institution does not qualify.

2.3. Special Cases and Exceptions

There are some special cases and exceptions to be aware of:

Ministers and Members of Religious Orders: Special rules apply to ministers and members of religious orders. Generally, their income is considered self-employment income and is eligible for the EIC.
Military Personnel: Nontaxable combat pay can be included in earned income, which may increase the amount of the credit.

2.4. Examples of Earned Income Scenarios

To illustrate what qualifies as earned income, here are a few examples:

Scenario 1: Sarah works as a registered nurse and earns $50,000 in wages, as reported on her Form W-2. Her wages qualify as earned income for the EIC.
Scenario 2: John is a self-employed carpenter and earns $30,000 in net earnings from his business, as reported on Schedule C. His self-employment income qualifies as earned income.
Scenario 3: Maria works as a driver for a ride-sharing service and earns $10,000, as reported on Form 1099-NEC. This income qualifies as earned income.
Scenario 4: David receives $5,000 in unemployment benefits. This does not qualify as earned income.
Scenario 5: Emily receives $2,000 in interest from her savings account. This does not qualify as earned income.

Understanding these scenarios can help you accurately determine what income qualifies for the EIC and whether you are eligible for the credit.

2.5. How to Determine Your Earned Income

To determine your earned income for the EIC, follow these steps:

Gather Your Tax Documents: Collect all relevant tax documents, including Form W-2, Form 1099-NEC, Schedule C, and Schedule F.
Identify Qualifying Income: Review each document to identify income that qualifies as earned income, as described above.
Calculate Total Earned Income: Add up all qualifying earned income amounts to determine your total earned income for the tax year.
Report Your Income: Accurately report your earned income on your tax return and Schedule EIC (Form 1040).

By following these steps, you can ensure that you accurately determine your earned income and properly claim the EIC.

An illustrative breakdown of what qualifies as earned income for the EIC, aiding individuals in determining their eligibility and maximizing tax benefits.

3. Adjusted Gross Income (AGI) and Its Impact on the Earned Income Credit

Adjusted Gross Income (AGI) is a critical factor in determining eligibility for the Earned Income Credit (EIC). Understanding how AGI is calculated and how it affects your ability to claim the EIC is essential for maximizing your tax benefits. Let’s explore the definition of AGI, how it is calculated, and its specific impact on the EIC.

3.1. Definition of Adjusted Gross Income (AGI)

Adjusted Gross Income (AGI) is your gross income minus certain deductions. It’s an important figure because many tax credits and deductions are based on your AGI. Gross income includes wages, salaries, tips, self-employment income, interest, dividends, and other sources of income.

3.2. How AGI Is Calculated

To calculate your AGI, start with your total gross income and subtract certain deductions. These deductions can include:

Educator Expenses: Qualified educators can deduct up to $300 of unreimbursed educator expenses.
Health Savings Account (HSA) Deduction: Contributions to a health savings account are deductible.
Moving Expenses for Members of the Armed Forces: Certain moving expenses for members of the Armed Forces are deductible.
Self-Employment Tax: You can deduct one-half of your self-employment tax.
IRA Deduction: Contributions to a traditional IRA may be deductible.
Student Loan Interest Deduction: You can deduct the interest you paid on student loans, up to $2,500.

The result of these subtractions is your Adjusted Gross Income (AGI), which is reported on line 11 of Form 1040.

3.3. AGI Thresholds for the Earned Income Credit (EIC)

The IRS sets AGI thresholds for the EIC each year. If your AGI exceeds these limits, you are not eligible for the credit. The AGI limits vary depending on your filing status and the number of qualifying children you have. For the tax year 2024, the AGI limits are as follows:

Children or relatives claimed	Filing as single, head of household, married filing separately or widowed	Filing as married filing jointly
Zero	$18,591	$25,511
One	$49,084	$56,004
Two	$55,768	$62,688
Three	$59,899	$66,819

3.4. How AGI Affects the Amount of the EIC

In addition to determining eligibility, AGI also affects the amount of the EIC you can receive. The credit is designed to provide the most benefit to those with the lowest incomes, gradually decreasing as income rises. The IRS uses a specific formula to calculate the credit amount based on your AGI and the number of qualifying children you have.

3.5. Strategies to Manage Your AGI

Managing your AGI can help you stay within the eligibility limits for the EIC and potentially increase the amount of the credit you receive. Some strategies to consider include:

Maximize Deductions: Take advantage of all eligible deductions to reduce your AGI. This can include deductions for IRA contributions, student loan interest, health savings account contributions, and self-employment tax.
Contribute to Retirement Accounts: Contributing to retirement accounts, such as a 401(k) or traditional IRA, can lower your AGI and provide long-term savings.
Manage Self-Employment Income: If you are self-employed, carefully track your income and expenses to ensure you are claiming all eligible deductions.
Consult with a Tax Professional: A tax professional can help you identify strategies to manage your AGI and maximize your tax benefits.

3.6. Example Scenario

Consider a single parent with two qualifying children. Their gross income for the year is $58,000. They are eligible to deduct $2,500 in student loan interest and $5,000 in IRA contributions. Their AGI is calculated as follows:

Gross Income: $58,000
Student Loan Interest Deduction: $2,500
IRA Contribution Deduction: $5,000
Adjusted Gross Income (AGI): $50,500

Since their AGI of $50,500 is below the AGI limit of $55,768 for a single filer with two qualifying children (for the tax year 2024), they are eligible for the EIC.

3.7. Resources for Calculating AGI

IRS Form 1040 Instructions: Provides detailed instructions on how to calculate AGI.
Tax Preparation Software: Guides you through the process of calculating AGI and ensures you claim all eligible deductions.
Tax Professionals: Can provide personalized advice and assistance in managing your AGI.

Understanding AGI and its impact on the EIC is crucial for maximizing your tax benefits. By managing your AGI and taking advantage of eligible deductions, you can increase your chances of qualifying for the EIC and receiving the maximum credit amount.

A graphic illustrating how Adjusted Gross Income (AGI) affects eligibility and the amount of the Earned Income Credit, guiding viewers to optimize their tax benefits.

4. Investment Income Limit and the Earned Income Credit

In addition to earned income and Adjusted Gross Income (AGI), investment income is another critical factor in determining eligibility for the Earned Income Credit (EIC). Understanding the investment income limit and what types of income are included is essential for accurately assessing your eligibility for the credit. Let’s delve into the details.

4.1. What Is the Investment Income Limit?

The investment income limit is the maximum amount of investment income you can have and still be eligible for the EIC. This limit is set by the IRS and may change each year. For the tax year 2024, the investment income limit is $11,600.

4.2. Types of Investment Income

Investment income includes a variety of income sources, such as:

Taxable Interest: Interest earned from savings accounts, certificates of deposit (CDs), and other interest-bearing accounts.
Dividends: Dividends received from stocks, mutual funds, and other investments.
Capital Gains: Net capital gains from the sale of stocks, bonds, real estate, and other capital assets.
Passive Income: Income from rental properties or businesses in which you do not actively participate.

4.3. How Investment Income Affects EIC Eligibility

If your total investment income exceeds the limit for the tax year ($11,600 for 2024), you are not eligible for the EIC, regardless of your earned income and AGI. This rule is in place to ensure that the EIC benefits those with low to moderate incomes who do not have significant investment holdings.

4.4. Examples of Investment Income Scenarios

To illustrate how investment income affects EIC eligibility, consider the following scenarios:

Scenario 1: John has $40,000 in earned income and $10,000 in investment income from dividends and interest. Since his investment income is below the $11,600 limit, he may be eligible for the EIC, provided he meets all other requirements.
Scenario 2: Maria has $20,000 in earned income and $15,000 in investment income from capital gains. Because her investment income exceeds the $11,600 limit, she is not eligible for the EIC, even though her earned income and AGI are within the eligible ranges.
Scenario 3: David has $30,000 in earned income and $11,500 in investment income. Since his investment income is less than the $11,600 limit, he may be eligible for the EIC, provided he meets all other requirements.
Scenario 4: Emily has $50,000 in earned income but $0 in investment income. She may be eligible for the EIC, provided she meets all other requirements.

4.5. How to Calculate Your Investment Income

To calculate your investment income, you’ll need to gather all relevant tax documents, including:

Form 1099-INT: Reports interest income.
Form 1099-DIV: Reports dividend income.
Form 1099-B: Reports proceeds from broker and barter exchange transactions (used to calculate capital gains).
Schedule D (Form 1040): Used to report capital gains and losses.
Schedule E (Form 1040): Used to report income or loss from rental real estate, royalties, partnerships, S corporations, estates, and trusts.

Once you have these documents, add up all taxable interest, dividends, capital gains, and passive income to determine your total investment income for the year.

4.6. Resources for Understanding Investment Income

IRS Publications: The IRS provides various publications that explain different types of investment income and how to report them on your tax return.
Tax Preparation Software: Tax software programs can help you calculate your investment income and determine whether you meet the EIC eligibility requirements.
Tax Professionals: A tax professional can provide personalized advice and assistance in calculating your investment income and assessing your EIC eligibility.

4.7. Strategies to Stay Below the Investment Income Limit

While you cannot retroactively change your investment income for a previous tax year, there are strategies you can consider for future tax years to potentially stay below the investment income limit:

Tax-Advantaged Accounts: Invest in tax-advantaged accounts, such as 401(k)s, IRAs, and 529 plans, which may reduce your taxable investment income.
Tax-Efficient Investing: Consider investing in tax-efficient assets that generate less taxable income, such as municipal bonds.
Consult with a Financial Advisor: A financial advisor can help you develop a tax-efficient investment strategy tailored to your individual circumstances.

Understanding the investment income limit and accurately calculating your investment income are crucial for determining your eligibility for the EIC. By managing your investment income and taking advantage of tax-advantaged strategies, you can increase your chances of qualifying for this valuable tax credit.

An explanation of the investment income limit for the Earned Income Credit, showing which income types are included and how they affect eligibility.

5. Filing Status and the Earned Income Credit (EIC)

Your filing status is a critical determinant of your eligibility for the Earned Income Credit (EIC). The IRS uses your filing status to determine the income thresholds and credit amounts that apply to you. Let’s explore how different filing statuses impact your ability to claim the EIC.

5.1. Eligible Filing Statuses for the EIC

To be eligible for the EIC, you must file using one of the following statuses:

Single: If you are unmarried, divorced, or legally separated according to state law.
Head of Household: If you are unmarried and pay more than half the costs of keeping up a home for a qualifying child.
Qualifying Widow(er) with Dependent Child: If your spouse died within the past two years and you have a dependent child.
Married Filing Jointly: If you are married and both you and your spouse agree to file a joint return.

5.2. Ineligible Filing Statuses for the EIC

You are not eligible for the EIC if you file using either of these statuses:

Married Filing Separately: Generally, you cannot claim the EIC if you file as married filing separately. However, there is an exception for taxpayers claiming the EITC who file married filing separately must meet the eligibility requirements under the special rule in the American Rescue Plan Act (ARPA) of 2021.
Married Filing Separately: If you are married and choose to file separately, you are generally ineligible for the EIC.

5.3. How Filing Status Affects Income Limits

The income limits for the EIC vary depending on your filing status. Married filing jointly has the highest income limits, while single, head of household, and qualifying widow(er) have lower limits. This means that married couples filing jointly can have higher incomes and still qualify for the EIC compared to individuals filing under other statuses.

For the tax year 2024, the income limits for different filing statuses are as follows:

Children or relatives claimed	Filing as single, head of household, married filing separately or widowed	Filing as married filing jointly
Zero	$18,591	$25,511
One	$49,084	$56,004
Two	$55,768	$62,688
Three	$59,899	$66,819

5.4. Examples of Filing Status Scenarios

To illustrate how filing status affects EIC eligibility, consider the following scenarios:

Scenario 1: John is single and has one qualifying child. His AGI is $45,000. Since he files as head of household and his income is below the limit for that status ($49,084), he may be eligible for the EIC, provided he meets all other requirements.
Scenario 2: Maria and David are married and have two qualifying children. They file jointly and their AGI is $60,000. Since they file as married filing jointly and their income is below the limit for that status ($62,688), they may be eligible for the EIC, provided they meet all other requirements.
Scenario 3: Emily and Tom are married but choose to file separately. Their combined AGI is $50,000, with Emily earning $30,000 and Tom earning $20,000. Because they file separately, neither of them is eligible for the EIC, unless they meet the requirements under the special rule in the American Rescue Plan Act (ARPA) of 2021.
Scenario 4: Sarah is a qualifying widow(er) with one dependent child. Her AGI is $48,000. Since she files as a qualifying widow(er) and her income is below the limit for that status ($49,084), she may be eligible for the EIC, provided she meets all other requirements.

5.5. How to Choose the Correct Filing Status

Choosing the correct filing status is crucial for maximizing your tax benefits and ensuring compliance with IRS rules. Here are some guidelines:

Single: Use this status if you are unmarried, divorced, or legally separated and do not qualify for another filing status.
Head of Household: Use this status if you are unmarried and pay more than half the costs of keeping up a home for a qualifying child. You must also have a qualifying child living with you for more than half the year.
Qualifying Widow(er): Use this status if your spouse died within the past two years and you have a dependent child. You must also have a qualifying child living with you for the entire year.
Married Filing Jointly: Use this status if you are married and both you and your spouse agree to file a joint return. This status often results in the lowest tax liability and provides access to more tax benefits.
Married Filing Separately: Use this status if you are married but choose to file separate returns. This status may be beneficial in certain situations, such as when one spouse has significant medical expenses or student loan debt. However, it often results in a higher tax liability and fewer tax benefits compared to filing jointly.

5.6. Resources for Determining Filing Status

IRS Publication 17, Your Federal Income Tax: Provides detailed information on filing statuses and how to choose the correct one.
IRS Interactive Tax Assistant: An online tool that helps you determine your correct filing status based on your individual circumstances.
Tax Professionals: A tax professional can provide personalized advice and assistance in choosing the best filing status for your situation.

Understanding how filing status affects your EIC eligibility is crucial for maximizing your tax benefits. By choosing the correct filing status and ensuring you meet all other requirements, you can increase your chances of qualifying for the EIC and receiving the maximum credit amount.

A visual guide explaining how different filing statuses affect eligibility for the Earned Income Credit, helping taxpayers optimize their tax returns.

6. Qualifying Child Rules for the Earned Income Credit

If you have a qualifying child, you may be eligible for a larger Earned Income Credit (EIC). However, the child must meet specific requirements to be considered a qualifying child. Let’s explore these rules in detail.

6.1. Basic Requirements for a Qualifying Child

To be a qualifying child for the EIC, the child must meet all of the following tests:

Age Test: The child must be under age 19 at the end of the year and younger than you (or your spouse if filing jointly), or under age 24 if a student, or any age if permanently and totally disabled.
Residency Test: The child must live with you in the United States for more than half the tax year.
Relationship Test: The child must be your son, daughter, stepchild, foster child, brother, sister, half-brother, half-sister, stepbrother, stepsister, or a descendant of any of them (for example, a grandchild, niece, or nephew).
Joint Return Test: The child cannot file a joint return for the year (unless the child and the child’s spouse are filing only to claim a refund of withheld income tax or estimated tax paid).
Dependent Test: You must claim the child as a dependent, or the child cannot be claimed as a dependent by someone else.

6.2. Age Test Explained

The age test has specific requirements depending on the child’s situation:

Under Age 19: The child must be under age 19 at the end of the year and younger than you (or your spouse if filing jointly).
Student Under Age 24: If the child is a student, they must be under age 24 at the end of the year and younger than you (or your spouse if filing jointly). A student is someone who is in school full-time for at least five months of the year.
Any Age if Permanently and Totally Disabled: If the child is permanently and totally disabled, there is no age limit. A person is considered permanently and totally disabled if they cannot engage in any substantial gainful activity because of a physical or mental condition, and a doctor has determined that the condition has lasted or can be expected to last continuously for at least a year or can lead to death.

6.3. Residency Test Explained

The residency test requires the child to live with you in the United States for more than half the tax year. Temporary absences, such as for school, medical care, or vacation, are generally counted as time lived at home. If the child lived with you for more than half the year, the residency test is met.

6.4. Relationship Test Explained

The relationship test specifies the types of relatives that qualify for the EIC. The child must be your:

Son or Daughter
Stepchild
Foster Child (placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction)
Brother or Sister
Half-Brother or Half-Sister
Stepbrother or Stepsister
Descendant of any of them (for example, a grandchild, niece, or nephew)

6.5. Joint Return Test Explained

The joint return test states that the child cannot file a joint return for the year. However, there is an exception if the child and the child’s spouse are filing only to claim a refund of withheld income tax or estimated tax paid. In this case, the child can still be considered a qualifying child for the EIC.

6.6. Dependent Test Explained

To meet the dependent test, you must claim the child as a dependent on your tax return, or the child cannot be claimed as a dependent by someone else. This means that no one else can claim the child as a qualifying child or dependent.

6.7. Tiebreaker Rules

If more than one person can claim the same child as a qualifying child, tiebreaker rules determine who can claim the EIC. The IRS provides the following tiebreaker rules:

If only one of the persons is the child’s parent, the child is treated as the qualifying child of the parent.
If both persons are parents but do not file a joint return, the child is treated as the qualifying child of the parent with whom the child lived for the longer period of time during the tax year. If the child lived with each parent for the same amount of time, the child is treated as the qualifying child of the parent who had the higher adjusted gross income (AGI).
If no parent can claim the child as a qualifying child, the child is treated as the qualifying child of the person with the highest AGI.

6.8. Examples of Qualifying Child Scenarios

To illustrate these rules, consider the following scenarios:

Scenario 1: John and Mary are married and have a 10-year-old son, David, who lives with them for the entire year. David meets all the requirements to be a qualifying child for the EIC.
Scenario 2: Sarah is a single mother with a 20-year-old daughter, Emily, who is a full-time student. Emily meets all the requirements to be a qualifying child for the EIC.
Scenario 3: Michael supports his 25-year-old brother, Tom, who is permanently and totally disabled and lives with him for the entire year. Tom meets all the requirements to be a qualifying child for the EIC.
Scenario 4: Lisa’s 17-year-old niece, Jessica, lives with her for the entire year. Jessica meets all the requirements to be a qualifying child for the EIC.
Scenario 5: Robert and his ex-wife, Susan, share custody of their 8-year-old daughter, Ashley. Ashley lived with Robert for 7 months and with Susan for 5 months. Robert can claim Ashley as a qualifying child for the EIC.

6.9. Resources for Determining Qualifying Child Status

IRS Publication 501, Dependents, Standard Deduction, and Filing Information: Provides detailed information on qualifying child rules and dependency requirements.
IRS Interactive Tax Assistant: An online tool that helps you determine whether a child qualifies for the EIC.
Tax Professionals: A tax