- 9 -
Subject to certain limitations, an eligible individual is
allowed a credit which is calculated as a percentage of the
individual’s earned income. Sec. 32(a)(1). Earned income
includes wages. Sec. 32(c)(2)(A). Section 32(c)(1)(A)(i), in
pertinent part, defines an “eligible individual” as “any
individual who has a qualifying child for the taxable year”. A
“qualifying child” is one who satisfies a relationship test, a
residency test, and an age test. Sec. 32(c)(3). The pertinent
parts of section 32(c)(3) provide:
(3) Qualifying child.--
(A) In general.--The term “qualifying child” means,
with respect to any taxpayer for any taxable year, an
individual--
(i) who bears a relationship to the taxpayer
described in subparagraph (B),
(ii) who has the same principal place of abode as
the taxpayer for more than one-half of such taxable
year, and
(iii) who meets the age requirements of
subparagraph (C).
(B) Relationship test.--
(i) In general.--An individual bears a
relationship to the taxpayer described in this
subparagraph if such individual is–-
(I) a son, daughter, stepson, or
stepdaughter, or descendant of any such
individual,
(II) a brother, sister, stepbrother, or
stepsister, or a descendant of any such
individual, who the taxpayer cares for as the
taxpayer’s own child, or
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011