Question

Felix and Isabella Franklin have been married since 2016. Felix is a U.S. citizen with a valid Social Security number. Isabella is a resident alien with an Individual Taxpayer Identification Number (ITIN). They elect to file Married Filing Jointly.Felix worked in 2019 and earned wages of $40,000. Isabella worked part-time and earned $10,000. They have two children: Rose, who is 3 years old, and Iris, who is 8 years old. Both children were supported by their parents all year. Rose is a U.S. citizen and has a valid Social Security number. Iris is a resident alien and has an ITIN.
Felix and Isabella paid $5,000 in daycare for Rose and Iris. The statement from the daycare provider includes the provider's name, address, valid Employer Identification Number, and the amount paid for Rose and Iris's care. Felix, Isabella, Rose, and Iris lived together in the U.S. all year.

Are the Franklins eligible to claim the earned income credit?

a. Yes, because everyone has a taxpayer identification number.
b. Yes, because Felix has a Social Security number.
c. No, because Isabella has an ITIN.
d. No, because their income is too high.

Answer 1

Yes, because everyone has a taxpayer identification number. So the Franklins eligible to claim the earned income credit.

Answer: Option B

Explanation:

Earned Income Credit is a returnable tax credit. People paying tax whose earning is low and moderate are the eligible for this EIC. Also, it has certain conditions to get this credit.  

From the given scenario, the Franklin's are eligible to claim the EIC. Because Felix has a Social Security Number and they filed jointly with Isabella. Also, they have qualifying children.  

Either a U.S. resident or a resident alien having a Social Security Number and jointly filed spouse with moderate income and having qualifying children are the qualifications for claiming the EIC.