How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Lev Your Own Question

Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22833
Experience:  Taxes, Immigration, Labor Relations
870116
Type Your Tax Question Here...
Lev is online now
A new question is answered every 9 seconds

Taxpayer is getting social security disability benefits. Taxpayer

Resolved Question:

Taxpayer is getting social security disability benefits. Taxpayer and spouse (married filing jointly) have three children. The three children are being claimed as dependents on their tax returns.

All of the three children have also received 1099-SA benefits in their name. They file their own tax returns reporting the 1099-SA and a very small interest and capital gain while the three children continue to be listed a dependents on their parents return. Will the parents qualify for earned income credit provided the parents satisfy the other requirements of EIC?

For the support test for the children to be dependents, will the parents have to support in dollar terms more than each child's 1099-SA benefits?
Submitted: 11 months ago.
Category: Tax
Expert:  Lev replied 11 months ago.

Lev :

Hi and welcome to our site!
Will the parents qualify for earned income credit provided the parents satisfy the other requirements of EIC?
Yes - if parents have earned income. Social security benefits are not considered earned income - IRS publication 596 defines earned income as - www.irs.gov/pub/irs-pdf/p596.pdf
see page 9 - Earned income includes all of the following types of income.
1. Wages, salaries, tips, and other taxable employee pay. Employee pay is earned
income only if it is taxable. Nontaxable employee pay, such as certain dependent
care benefits and adoption benefits, is not earned income. But there is an exception
for nontaxable combat pay, which you can choose to include in earned income, as
explained later in this chapter.
2. Net earnings from self-employment.
3. Gross income received as a statutory employee.

Lev :

For the support test for the children to be dependents, will the parents have to support in dollar terms more than each child's 1099-SA benefits?


To meet the Support Test (To Be a Qualifying Child), the child cannot have provided more than half of his or her own support for the year.
The worksheet may be find on page 15 in this publication - http://www.irs.gov/pub/irs-pdf/p501.pdf
Please be aware that for the purpose on this test expenses are considered - not income.
Thus - if the child received SS benefits and all these benefits are spent on his/her own support - that amount is included. However - if that amount is put into child's saving account - that amount is not included into support test determination.

Customer:

For dependent support test purposes, do the parents have to provide more than twice of the amount of the children's 1099SA. For example if each child is receiving 6,000 dollars, do the parents have to earn more than 36,000. This assumes the children are receiving benefits of 6,000 each.

Lev :

Please be aware that for the purpose on this test expenses are considered - not income.
For example if the child is receiving 6,000 dollars - and ALL that amount was spent on his/her own support - parents MUST SPEND at least the same amount for that child.

Customer:

If the taxpayer's social security income is $ 29,000 and his other income is 10,000 total $ 39,000 then

Customer:

is the support test met?

Lev :

Again - for the support test - we need NOT to consider income - but expenses.
For instance - we need to use the fair rental value of the home - that is not related to income.
Support test in NOT based on income - but rather is based on expenses.

Lev :

We need to prepare the worksheet from page 15 in this publication - http://www.irs.gov/pub/irs-pdf/p501.pdf
and that worksheet will determine if the support test is met or not.

Lev :

I understand that expenses are based on income - and we often confuse these - but there is no direct relations - and we need to use expenses for this test.

Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22833
Experience: Taxes, Immigration, Labor Relations
Lev and 6 other Tax Specialists are ready to help you
Expert:  Lev replied 11 months ago.
Our chat has ended, but you can still continue to ask me questions here until you are satisfied with your answer. Come back to this page to view our conversation and any other new information.

What happens now?

If you haven’t already done so, please rate your answer above. Or, you can reply to me using the box below.

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.