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Newberry, State of South Carolina, entered an order awarding Ms.
Hamilton custody of Rebecca. While Ms. Hamilton had legal
custody during 1999, there are ambiguities with respect to where
Rebecca resided and the duration of Rebecca’s residence. She
spent time with both parents, and both parents contributed to her
support.
On their separate 1999 Federal income tax returns, both
petitioners claimed head of household filing status and a
dependency exemption deduction and an EIC with Rebecca as a
qualifying child. Additionally, Mr. Hamilton claimed a child tax
credit with respect to Rebecca.
In the notice of deficiency issued to Ms. Hamilton,
respondent determined that she was the custodial parent of
Rebecca and allowed her the dependency exemption deduction.
Respondent, however, disallowed Ms. Hamilton’s claimed head of
household filing status and the EIC with respect to Rebecca. As
to Mr. Hamilton, respondent disallowed the claimed dependency
exemption deduction and the child tax credit with respect to
Rebecca.
Discussion
Earned Income Credit
Section 32(a) generally provides eligible individuals with
an EIC against their income tax liability. An "eligible
individual" is defined as an individual who has a "qualifying
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