10.3.3 Residency Test

The majority of issues that arise under the “qualifying child” definition involve the residency test. Generally, the contested issues involve documentation of the child’s residency and not legal issues.

The child must have lived with the taxpayer in the United States for more than half of the year.1  Note that for the EIC, there is no “support” or “household maintenance” test if the taxpayer can properly file as single or married filing jointly. A taxpayer can meet the residency test even if the other parent has custody under a court decree and provided more than half the support.2

A home is anywhere the taxpayer regularly lives and can include nontraditional homes such as homeless shelters. The legislative history of the EIC indicates that determinations of an individual’s principal abode should be made under rules similar to those for the head-of-household filing status.3

Temporary absences can count toward the half-year or whole-year requirements if the taxpayer or child is away from home due to special circumstances such as illness, school attendance,4  business or military service, vacation, detention in a juvenile facility, kidnapping (if not committed by a family member), or disaster displacement. Although not listed in IRS Publication 596, pre-conviction detention in a jail and custody agreements where the child is absent for less than 6 months may also count.5  In Rowe v. Commissioner, the taxpayer was eligible for the EIC even though she was absent from the household for the last 7 months of the year due to her confinement in jail.6

Tax preparation services often counsel a taxpayer not to claim a resident child if someone else has already filed for the EIC based on that child, even if the other person was not eligible to claim the child. The IRS will deny an electronic return where someone else has already filed for the EIC. In this situation, the proper procedure is to file a paper return, which will prompt an IRS examination to determine which taxpayer is entitled to claim the child for the EIC. The taxpayer will then have the chance to offer evidence of residency and to appeal if necessary.

• 1Prior to 2002, an “eligible foster child” had to live with the taxpayer for the whole year in order to be a qualifying child for the taxpayer’s EIC claim.
• 2Webb v. Comm’r, T.C. Memo 1990-581.
• 3H.R. Rep. No. 101-964 (1990).
• 4College attendance cannot count as a “temporary absence” if the child resided away from home at college and does not intend to return to the taxpayer’s home. Schatz v. Comm’r, T.C. Memo 1981-341.
• 5Cf. 26 C.F.R. § 1.2-2(c)(1) (temporary absence pursuant to custody agreement is “special circumstance”); Rowe v. Comm’r, 128 T.C. 13 (2007).
• 6Rowe, 128 T.C. 13.