EITC

[ChiHoang]

My client files married jointly. They have a home in the US, but one of them does not live in the US for more than 6 months. Can they claim EITC ? If not, what is an option ?

[Just-Lisa-Now-]

https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/who-qualifies-for-the-ea...

U.S. Citizen or Resident Alien

To claim the EITC, you and your spouse (if filing jointly) must be U.S. citizens or resident aliens.

If you or your spouse were a nonresident alien for any part of the tax year, you can only claim the EITC if your filing status is married filing jointly and you or your spouse is a:

• U.S. Citizen with a valid Social Security number or
• Resident alien who was in the U.S. at least 6 months of the year you're filing for and has a valid Social Security number

[BobKamman]

So what we need to know is whether the spouse who does not live in the US is nevertheless a US citizen or resident alien.

[ChiHoang]

Husband is a US permanent resident, but does not live in the US for more than 6 months. Wife is a US citizen, owns a home, has earned income, and lives in the US more than 6 months. They have a daughter as dependent. Are they qualified for ETIC ?

[ChiHoang]

Husband had some foreign income ($5K) in 2023, but not filing form 2555.

[BobKamman]

Then where the husband lives does not matter. Where the daughter lives makes a difference.  And of course, the husband's worldwide income must be reported, regardless of where he lives.  If he qualifies for the exclusion for income earned abroad, there are special rules for computing EIC.  

[TaxGuyBill]

If the child's "principal place of abode" is in the US with at least on of the parents, it will qualify.

[ChiHoang]

Thanks for your quick response.

The daughter lives with her mother in the US. The husband has foreign income of $5,333 and is qualified for foreign income exclusion, but I'm not filing form 2555. I think if I file form 2555, it will disqualify them for EIRC.

So it does not matter if he does not live in the US more than 6 months. It's confusing because in ProSeries, for "required to calculate EIC" I check NO for the second box " was taxpayer's .....more than 1/2 of 2023, it will not calculate EIC for them.

Please advise

[TaxGuyBill]

In this case, it means either parent.  But the EIC rule is more based on where the child lives.

[ChiHoang]

So as you said if the husband is a permanent resident and does not live in the US more than 6 months. They will qualify for EITC.

But why answering NO to the second box of "calculate Earned Income Credit:" in ProSeries, it will not calculate EITC. ? 

[TaxGuyBill]

I think that is an error in the program.

If they did NOT have child, then both spouses' "abode" would need to be in the United States.

But I don't see any such restriction if they have a child.  It is based on the child's abode, and if the child lived with the taxpayer for over half of the year (and living with the taxpayer for over half of the year can apply to either spouse).

[ChiHoang]

Thank you for your answer. If it's an error in the program, then I should answer YES in the second box so it calculates ETIC.