LA Business Daily

Do I have to have the higher adjusted gross income to claim my children for the Earned Income Credit?

My fiancee has the higher gross income. We have 2 children together and we are trying to figure out the most beneficial way to file our taxes for 2006. It looks like the best way is for me to claim our 2 children, even though he has the higher adjusted gross income. With me claiming the children and using H&R Block online tax software I get a substantial amount more money back than he would. Therefore, am I permitted to claim the 2 children instead of him and claim them for the EIC? I just want to make sure that we file everything correctly. Thanks for any help in advance. PS: We even used the IRS EIC Assistant to figure out the EIC information for us too and it matched the H&R Block software results fairly accurately. It looks like it should be fine to file this way but I just want to be safe that we are filing properly to ensure maximum benefits. We live together and have for a number of years and both of the children live with us all year as well. Therefore, I am under the assumption that we can pick and choose which one of us can claim the children. Is this thinking correct? Does the person who makes more money have to claim the children?

Public Comments

1. Plain and simply, which of you two can claim the children as dependents? THAT person MUST claim them on the 1040; then you can see if the E.I.C. is applicable.
2. stop...... you two are NOT married therefore one of you two has to claim them on your income taxes. Now this is where it gets tricky, your fiancee can techinally claim Head of Household (but doing so is a serious hit on the EIC. However in the long run (until you two get married) it would be beneficiall to file single. If you get married at ANY time in this calendar year then you can file married filing joint (and thus head of hosuehold and in most cases single is off the table) for your 07 taxes (and you do know the dealine for 06 has passed meaning if youw two owe then you will be hit with late fees and penalties unless you filed an extension) If your income is NOT ridicusoly low (under 10k) then it will be ok for you to claim them.
3. don't know but i got married a year ago and she had a student loan out that i did not know about and she did not work that year she took care of are kids instead .because i do not like day cares . so they the loan people got the whole return so watch out
4. either of you can claim the children, as long as both of you don't. before you assume it's better for you to claim them, you have to take into consideration how much of your fiances money the irs will be keeping. whatever way the irs ends up keeping less of your money (combined) is the best way to file.
5. If you live together, your children live with you all year, and you are not married, then you can choose which of you claims the children. It doesn't have to be the one with the higher income. Depending on what your respective incomes are, it is very possible that the one with the lower income would get more from EIC than the one with the higher income.
6. It is not a requirement that the parent with the higher income must claim the children. What you suggest may be the best alternative for you. You can also split the benefits between the two of you and maybe get more refund. The following tax benefits can be assigned to different parents: 1. The EIC 2. The dependency exemption and child tax credit It might be best to have you claim the children for EIC, and the higher earning parent claim the dependency exemptions and the CTC. The higher earning parent should probably file as Head of Household and the lower earning parent file as Single.