EIC Credit and Nonresidents

[Note: This answer is totally incorrect. See the comments below the answer.]

Today TaxMama® hears from Reginald in the TaxQuips Forum who has this question.  “Is the Earned Income Credit available to a US citizen couple, married filing a joint return, who live out of the country? They do have qualifying children. The only reference I can find refers to Non-Resident Aliens, these folks are Non-Resident Citizens.”

Ask TaxMama

Hi Reginald,

Yes, if they are US citizens, they are certainly eligible for the EIC, regardless of where they live.

Under the question about who is entitled to the Earned Income Credit, IRS includes this statement:

You must be a U.S. citizen or resident alien all year, or a nonresident alien married to a U.S. citizen or resident alien and filing a joint return.

Children of US citizens are US citizens, regardless of where they were born. Although, they may get the privilege of dual citizenship, if they choose.

And remember, you can find answers to all kinds of questions about the earned income credit and other tax issues, free. Where? Where else? At www.TaxMama.com.

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6 thoughts on “EIC Credit and Nonresidents

  1. TaxMama says:

    Ah well, you’re all correct.

    Thank you ALL!

    I’ll admit that I answered this without looking it up because I was sure Roger had once mentioned that as a strategy. Clearly, even Roger says this is not so.

    You win, I will have to retract my answer.


  2. joseph shaw says:

    Dear TaxMama,

    I agree with Oscar. Look again at Pub. 596, under “Rules If You Have a Qualifying Child,” where it says “Your child must have lived with you in the United States for more than half of 2011.” See:

    https://www.irs.gov/publications/p596/ch02.html#en_US_2011_publink1000167264 .

    I live overseas, and I asked this question to the IRS Helpline about 8 years ago, as taking the EIC would have been extremely beneficial to me and the U.S. citizens whose taxes I do, and the representative told me in no uncertain terms that if I do not live with the child for a majority of the year in the U.S., I cannot take the EIC — and she went ahead and listed the penalties and punishments if one attempts to do so unlawfully.

    Please check it out for us. Thanks!

  3. Roger Adams says:

    They may not claim the children; they are ineligible because they fail the residency test. To claim residency the children MUST HAVE LIVED WITH THE PARENTS IN THE UNITED STATES FOR MORE THAN HALF A YEAR (Pub. 596,p.13).
    It is true that I sometimes recommend to my clients to elect the Foreign Tax Credit rather than the Exclusion so that they may claim earned income and the resulting benefits thereof, but the EIC is never the point. The 18,000 joint filers ceiling (without kids) is so puny as to make the issue irrelevent.

    Best regards,

  4. Oscar Abraham says:

    Question 6 of Form EIC asks
    Number of months child lived with you in the United States during 2011
    • If the child lived with you for more than half of 2011 but less than 7 months,
    enter “7.”
    • If the child was born or died in 2011 and your home was the child’s home for the
    entire time he or she was alive during 2011, enter “12.”

    This seems to indicate that both taxpayer and the child lived in the United State for more than half of the year.

  5. TaxMama says:

    Thanks for the feedback Lucie,

    Usually, you’re right.
    In this case, not.

    Column #3 where is does say “14. You must have lived in the United States more than half of the year. ”
    Refers to : “Rules If You Do NOT Have a Qualifying Child”

    They do have a qualifying child.

    I know the EIC is permissible because Roger will often waive the right to the Foreign Eaned Income exclusion and pick up the credit for the local taxes instead in order to claim the EIC, a variety of other credits, like the Child Tax Credit, and the right to make contributions to IRAs and Roths.


  6. Lucie Sample says:

    Hey Mama,

    Not quite. IRS Pub. 596 clearly states that you must live in the US for more than half the year to qualify. Sorry…

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