Discussion:Claiming dependent

Not really sure whether her mother was required to file a return under Sec. 6012. If she received advance payments of EIC, then she would obviously be required under 6012 to file a return.

Thanks.

"For purposes of section 152(d)(1)(D),an individual is not a qualifying child of “any other taxpayer” if the individual’s parent (or other person with respect to whom the individual is defined as a qualifying child) is not required by section 6012 to file an income tax return and (i)does not file an income tax return, or (ii)files an income tax return solely to obtain a refund of withheld income taxes."

If a person is not required to file a tax return, but files one anyway to claim EIC, then the person is no longer filing a return soley to obtain a refund of withheld income taxes. Ergo, the person is considered a taxpayer for the purposes of §152

Eztax, that is an interesting question. Technically, a self-employment return is not required under Sec. 6012. Instead, the SE return is required under 6017.

Calling the author, huh? That'd be a trip.

I think the emphasis is on "not a qualifying child of another taxpayer." In other words, the required tests or rules to be a QC are not in of themselves adequate to preclude someone from claiming a child as a QR under Sec. 152(d)(1)(D). The Notice clarifies this.

The taxpayer not required to file under Sec. 6012 is still paying FICA and thus is still a "taxpayer" in that sense. Therefore, a child of such a "taxpayer" with 1K of profit on Sch C as EZTAX cited, in my opinion, would be able to be claimed as a QR by someone else - given the other QR tests were met.

After the holiday, perhaps we can get the author to comment.

Had a thought today while trying to figure this out that I will share, just to make sure we stay confused...

Taxpayer can claim girlfriend’s kid if girlfriend is not a "taxpayer" (this is what we are trying to sort out). We know that girlfriend can file to get full refund of taxes withheld and the boyfriend can still claim child. The example in 2008-5 also says that if girlfriend files to claim EIC for her kid then boyfriend does not get the deduction. But...

In example 2 of IRS notice 2008.5 [1] it says that if girlfriend files a claim for a refund of taxes withheld, but not the EIC for the kid, boyfriend does get the deduction.

But when the girlfriend files she would still get an EIC just for her (if she otherwise qualifies, age etc.) So wouldn't that disqualify the boyfriend's deduction? Can she file and refuse her EIC even though she is eligible? (Sorry it is late and I know I am over-thinking this!)

I know - that is what I was not clearly saying - which would permit EZ's example to qualify.

1) Every individual, other than a nonresident alien, having net earnings from self-employment, as defined in section 1402, of $400 or more for the taxable year shall make a return of such earnings. .... A return is required under this section if an individual has self-employment income, as defined in Sec. 1402(b), even though he may not be required to make a return under section 6012 for purposes of the tax imposed by section 1 or 3. Provisions applicable to returns under section 6012(a) shall be applicable to returns under this section.