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III. Child Tax Credits
Section 24(a) authorizes a child tax credit with respect to
each “qualifying child” of the taxpayer. As relevant to these
particular facts, a “qualifying child” means, among other things,
an individual with respect to whom the taxpayer is allowed a
deduction under section 151. Sec. 24(c)(1)(A). This Court has
already concluded that petitioner is not entitled to dependency
exemptions under section 151 for RJM and CGM. Accordingly, RJM
and CGM do not fit within the meaning of “qualifying child” as
defined by section 24(c). The Court concludes that petitioner is
not entitled to a child tax credit for his nieces.
IV. Earned Income Credit
Section 32(a)(1) allows an eligible individual an earned
income credit against the individual’s income tax liability.
Section 32(a)(2) limits the credit allowed through a phaseout,
and section 32(b) prescribes different percentages and amounts
used to calculate the credit. The limitation amount is based on
the amount of the taxpayer’s earned income and whether the
taxpayer has no children, one qualifying child, or two or more
qualifying children.
To be eligible to claim an earned income credit with respect
to a child, the taxpayer must establish that the child satisfies
a relationship test, a residency test, and an age test.
Sec. 32(c)(3). In order for a niece to meet the relationship
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Last modified: November 10, 2007