Can a Grandmother Take the Earned Income Credit for a Grandchild?
- To earn the EITC, a grandparent must have a qualifying child — or in this case, grandchild — to claim as a dependent. In general, grandchildren may qualify. Specifically, however, grandchildren must not be claimed as a dependent by anyone else. A grandparent can't claim a child if he is also claimed by his parents in most situations. A qualifying child must be 19 or younger, or 24 or younger if he's a student. The child must live with the grandparent for at least half of the year.
- If both the parent and grandparents claim the child for the EITC, the credit defaults to the parent. If there are no parents to claim the child, then the EITC goes to the individual with the highest adjusted gross income for the year. If that person is the grandparent, she benefits from this tax credit. Further, if a parent can claim the child but doesn't, the credit goes to the grandparent only if the grandparent's adjusted gross income is higher than the parent's.
- Grandparents must meet a number of other requirements to earn the EITC for their grandchildren. The grandparent must be a U.S. citizen, resident alien or nonresident alien married to a U.S. citizen. She must have a valid Social Security number and earned income from the year, either from employment or self-employment. The grandparent can't file her taxes as married, filing separately.
- Grandparents who apply for the EITC have two ways of determining their credit. They can have the IRS calculate the credit, as explained in Publication 596. On Form 1040, grandparents may enter "EIC" on the dotted line next to "64a" to have the IRS calculate the credit. Alternatively, grandparents may use the "EITC Assistant" tool online to calculate their own credit.