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The IRS changed its position on who may claim the earned income tax credit (EITC) without a qualifying child in situations in which an individual meets the definition of a qualifying child for more than one taxpayer. Under the new rules, a taxpayer who may not claim an individual as a qualifying child after applying the tie-breaker rules may now claim the EITC without a qualifying child, if all other requirements are met.
The new rule is explained in proposed regulations issued on January 19, 2017. This change affects all open tax years. Thus, for example, you may apply this rule on a 2016 return or an amended return for an earlier year that is open under the statute of limitations. Note that most individuals only have until April 15, 2017 to amend a 2013 tax return to claim a refund.
This new rule may apply in households in which an individual meets the definition of a qualifying child for more than one taxpayer. For example, this new rule may apply in households in which grandparents, children, and grandchildren live together or in households with unmarried parents who both work. For more information and examples, see Applying Tiebreaker Rules to the Earned Income Tax Credit.
We will have further updates on these proposed regulations soon. We are working with software providers, tax return preparers, and other partners to get the word out and to update software and forms and instructions.
Find out more about educational opportunities for finding out more about refundable credit eligibility rules, tax law and regulations updates, return preparer’s due diligence requirements and more. Many of the opportunities offer continuing education credits.
Post a link to, or download this electronic guide for finding EITC information on line. Pub 4935, Guide to Everything Earned Income Tax Credit for Individuals Online helps you find the information you need to determine eligibility for EITC and how to file accurate EITC claims. This publication describes a topic briefly and then provides a link to an on line resource for more information. We also have an electronic guide for return preparers, find the guide, Pub 4933, Tax Preparers Guide to Everything Earned Income Tax Credit Online here.
IRS Urges Taxpayers to Choose a Tax Preparer Wisely for the Filing Season Ahead. Find tips for choosing a tax return preparer here or view the IRS videos on YouTube: