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Petitioner claimed the earned income credit in 1995 and 1996
based on having a qualifying child, her daughter Ayla.
Petitioner claimed head of household filing status in 1996.
Respondent does not contend that Ayla is not a qualifying child
with respect to petitioner. Respondent disallowed the earned
income credit because respondent contends that Ayla is a
qualifying child with respect to the grandparents, who have a
higher modified adjusted gross income than petitioner.
Respondent also determined that petitioner's filing status was
single.
Section 32 provides that an eligible individual is allowed a
credit calculated as a percentage of the individual’s earned
income. An eligible individual includes an individual with a
qualifying child. Sec. 32(c)(1). However, if two or more
individuals would be treated as eligible individuals with respect
to the same qualifying child for taxable years beginning in the
same calendar year, only the individual with the highest modified
adjusted gross income for such taxable years shall be treated as
an eligible individual with respect to such qualifying child.
Sec. 32(c)(1)(C).
In 1995 and 1996, the years in issue, the definition of
"qualifying child" under section 32(c)(3) was the same definition
originally enacted on November 5, 1990, in the Omnibus Budget
Reconciliation Act of 1990 (1990 Act), Pub. L. 101-508, sec.
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