So my 28 year old nephew is going to school full time. He totally supports himself by working part time and using grants and loans for school. He made about $6700 in 2016. So he ha no tax liability and gets back what little he put in. Since he’s a sophomore in school, he also qualifies for the refundable portion of the AOC. Which to him is huge. Turbo Tax is also giving him and Earned Income Credit of $506. Could this be true? I’ve searched but can’t find where it says either yes or no.
Sorry – I don’t get what you are uncertain about.
A single adult does qualify for an EIC if their income/earnings fall within appropriate limitations – see https://apps.irs.gov/app/vita/content/globalmedia/earned_income_credit_table_1040i.pdf (according to that chart, the EIC for a single taxpayer, no dependents, earning $6700 is $506 - exactly what you say Turbo Tax is showing).
Since he not anyone’s dependent and attended college, he is also entitled to the AOC, according. Certainly my kids have taken whatever tuition credits or deductions were allowed to them during years that they attended college and were financially independent.
So again… what’s your question? Why would you have any reason to doubt the Turbo Tax calculation?
I wondered the same last year…when my kid got both!
Single person without a child with income/AGI under $14,880 and between ages of 25 and 65 can qualify for EITC.
Since he is 28 and supporting himself, he is not the dependent of another taxpayer, therefore he can claim the AOTC (since he has no tax liability, only the refundable part).
If he qualifies income and age wise, then he can also get EITC.
Thanks. I was only wondering if being a full time student disqualified him from the EIC.
Certainly not – student status has no relevance at all in the tax code for independent adults. At any age, whether a student or not, as long as he can’t be claimed as someone else’s dependent, if earned income falls within the qualifying range, the EIC credit can be claimed.
However, you’ll note from the chart I posted that $506 is the current maximum that any taxpayer without dependents could claim. To get that maximum, the person needs to earn more than $6600 but less than $8300, which is the point at which the EIC starts to phase out. So it is not a whole lot of money going to to working students.
I am guessing your confusion comes from the rules about when parents can claim adult offspring as dependents, which does usually turn on student status. A person who is a dependent of another does not qualify for EIC, so indirectly that student=dependent status will result in denial of the EIC credit. But IRS rules only allow parents to claim adult students as dependents up to age 24 – so even if he were receiving a significant financial contribution from his parents, your 28 year old nephew probably couldn’t be claimed as a dependent based on his status as a full time student.