To meet the relationship test for EIC, the child must be?
The correct answer and explanation is:
To meet the relationship test for the Earned Income Credit (EIC), the child must be a qualifying child under specific criteria defined by the IRS. These include the following conditions:
- Age: The child must be under the age of 19 at the end of the tax year, or under the age of 24 if a full-time student for at least five months of the year. If the child is permanently and totally disabled, there is no age limit.
- Relationship: The child must be the taxpayer’s son, daughter, stepchild, foster child, or a descendant of any of them (such as a grandchild). The child could also be a sibling, stepsibling, or a descendant of a sibling, such as a niece or nephew.
- Residency: The child must have lived with the taxpayer in the United States for more than half the year. Temporary absences, such as for school, vacation, medical care, or military service, do not count against the residency requirement.
- Support: The child must not have provided more than half of their own support during the tax year. If the child financially supported themselves more than the taxpayer, they may not be considered a qualifying child for EIC.
- Joint Return: The child must not file a joint return for the year, unless they are filing solely to claim a refund of withheld taxes or estimated taxes.
For the taxpayer to claim the EIC, the child must meet all these tests. If the child is related, lives with the taxpayer for the required time, is under the appropriate age, and doesn’t provide more than half of their own support, they will be considered a qualifying child. These rules ensure that the credit is available to individuals raising children who rely on their support.