I.R.C. § 32 provides the statutory rules for the EIC. The easiest way to understand all the EIC rules is to consult Chapters 1 to 3 of IRS Publication 596, which allows you to quickly assess your client’s EIC eligibility.
This publication cogently groups the various EIC rules into 3 sets:
- Rules for Everyone
- Rules If You Have a Qualifying Child
- Rules If You Do Not Have a Qualifying Child
Chapter 4 explains the income limits for the EIC.
The basic rules for the EIC are income limits, earned income, ineligibility of persons who legally must file as “married filing separately”, and the relationship, age, and residency tests for any qualifying child. A low-wage worker can receive an EIC refund even if there is no dependent, but most of the issues confronted by the tax attorney will involve the claiming of dependents and whether the dependent is a qualifying child or relative for EIC purposes.