Question

Virginia wants to claim eitc based on Kellie her granddaughter and qualifying child who lives with her. Herman, Kelly's father, also lives with them and would like to claim his daughter Kelly for eitc however Herman's only income for the year was $2,500 of unemployment. he contribute nothing else to the household. Which is accurate?
A) Herman holds a higher right and may claim eitc based on Kelly because Herman is Kelly's parent. B) Virginia may claim eitc based on Kelly as her AGI was higher than Herman and Herman has no earned income and thus does not qualify for eitc. C) Herman and Virginia may agree to each claim one half of the eitc based on Kelly their qualifying child

Answer 1

Explanation for incorrect options:

A) There is no rule where a preference of chain is given to claim EITC. Grand daughter and daughter both are eligible for the credit, however since Herman does not have earned income he may not get the credit.

C) Since Herman is not having earned income there is no question of sharing the credit.

Explanation for correct option:

B) Virginia may claim EITC based on Kelly as her AGI was higher than Herman and Herman has no earned income and thus does not qualify for EITC, thus this option is correct.

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