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Working Grandparents Raising Grandchildren May Qualify for EITC

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By Amanda L. Richter, CPA

Grandparents who work and raise dependent grandchildren may be eligible for the earned income tax credit (“EITC”), which is a refundable tax credit, even if the grandparent is 65 years of age or older. This means that those who qualify and claim the credit could pay less federal tax or even receive a tax refund. To qualify, the grandchild must meet the dependency and qualifying child requirements. These requirements are the same for parents claiming the EITC.

Here are some of the basics:

To claim your grandchild as a dependent, the child must be 18 years or younger or a student under 24 years of age as of the end of the year. If the child is permanently and completely disabled, there is no age limit.

In addition, a qualifying child must live with you for more than half of the year and must be your (1) child or stepchild (or descendants), (2) brother, sister, stepbrother, stepsister (or their descendants), or (3) eligible foster children.

If your grandchild meets the above requirements, you may qualify for the credit if your income does not exceed the following amounts and have investment income of less than $3,450:

Filing Status Income Limit for 1 Child Income Limit for 2 Children Income Limit for 3 + children
Single/Head of Household $40,320 $45,802 $49,194
Married filing joint $46,010 $51,492 $54,884

 

The amount of the EITC varies by family size, for instance if you have three or more qualifying dependents, the maximum EITC for 2018 is $6,431. Families with two qualifying dependents have a $5,716 maximum credit and one qualifying dependent has a maximum credit of $3,461.

Be aware that by law, the IRS cannot issue refunds before mid-February for tax returns that claim the EITC or the additional child tax credit. The law requires the IRS to hold the entire refund – even the portion not associated with the EITC.

Please call our office at 757-399-7506 if you wish to discuss these rules further as they apply to your situation.

Kit KatAsk Kit Kat – Llamas & Flu

Hook Law Center: Kit Kat, what can you tell us about llamas and what they have to do with the flu?

Kit Kat: Well, it turns out that llamas are actually contributing to a new type of flu vaccine. It’s still in the preliminary stages, but the research sounds quite promising. Apparently, what is unique about llamas is that they make “an array of immune system antibodies so tiny they can fit into crevices on the surface of an invading virus,” according to Melissa Healy, a writer from the Los Angeles Times, who wrote an article on the subject. This capability is critical to developing a nasal flu vaccine which may have the added benefit of being administered only once in a lifetime! Who knew the humble llama had such capability to help humans?

Leading the way in this research is the Scripps Research Institute in La Jolla, CA. The Scripps study has international participation and partial funding from the National Institutes of Health. What the scientists there are attempting to do is design a universal vaccine against the flu. If such a thing is possible, it will no longer be necessary to design a new flu shot every season to target a specific strain. So, the scientists vaccinated the llamas to fight several types of A and B strains of flu. Next, they extracted blood samples from the llamas which contained antibodies their bodies had developed to fight the flu. They found four extremely small antibodies, which had the ability to destroy many different types of flu. They dubbed these “nanobodies.” Then, here is where the scientists got creative. They realized that it might be difficult to transfer these nanobodies to humans, so they developed a gene delivery system to transfer the nanobodies to humans. This is complicated stuff, so more trials will have to be conducted on other animals and in humans, but the process appears to be sound and shows great promise. Stay tuned for further updates on this fascinating subject. (Melissa Healy, “Llamas may be  key to flu vaccine,” The Virginian-Pilot, November 3, 2018, p.6)

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Posted on Monday, November 19th, 2018. Filed under Senior Law News.
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