Grandparents who work and are also raising grandchildren might benefit from the earned income tax credit. The IRS encourages these grandparents to find out.
The EITC is a refundable tax credit. This means that those who qualify and claim the credit could pay less federal tax, pay no tax, or even get a tax refund. Grandparents who are the primary caretakers of their grandchildren should remember these facts about the credit:
A grandparent who is working and has a grandchild living with them may qualify for the EITC, even if the grandparent is 65 years of age or older.
Generally, to be a qualified child for EITC purposes, the grandchild must meet the dependency and qualifying child requirements for EITC.
The rules for grandparents claiming the EITC are the same for parents claiming the EITC.
Special rules and restrictions apply if the child’s parents or other family members also qualify for the EITC.
There are also special rules for individuals receiving disability benefits and members of the military.
To qualify for the EITC, the grandparent must have earned income either from a job or self-employment and meet basic rules.
Eligible grandparents must file a tax return, even if they don’t owe any tax or aren’t required to file.
Qualified taxpayers should consider filing electronically. It’s the fastest and most secure way to file a tax return and get a refund.