26 C.F.R. § 1.32-2

Earned income credit for taxable years beginning after December 31, 1978

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(a) [Reserved]

(b) Limitations. (1) [Reserved]

(2) Married individuals. No credit is allowed by section 32 in the case of an eligible individual who is married (within the meaning of section 7703 and the regulations thereunder) unless the individual and spouse file a single return jointly (a joint return) for the taxable year (see section 6013 and the regulations thereunder relating to joint returns of income tax by husband and wife). The requirements of the preceding sentence do not apply to an eligible individual who is not considered as married under section 7703(b) and the regulations thereunder (relating to certain married individuals living apart).

(3) Length of taxable year. No credit is allowed by section 32 in the case of a taxable year covering a period of less than 12 months. However, the rule of the preceding sentence does not apply to a taxable year closed by reason of the death of the eligible individual.

(2) Earned income. For purposes of this section, earned income is computed without regard to any community property laws which may otherwise be applicable. Earned income is reduced by any net loss in earnings from self-employment. Earned income does not include amounts received as a pension, an annuity, unemployment compensation, or workmen's compensation, or an amount to which section 871(a) and the regulations thereunder apply (relating to income of nonresident alien individuals not connected with United States business).

(d) [Reserved]

(e) Coordination of credit with advance payments—(1) Recapture of excess advance payments. If any advance payment of earned income credit under section 3507 is made to an individual by an employer during any calendar year, then the total amount of these advance payments to the individual in that calendar year is treated as an additional amount of tax imposed (by chapter 1 of the Code) upon the individual on the tax return for the individual's last taxable year beginning in that calendar year.

(2) Reconciliation of payments advanced and credit allowed. Any additional amount of tax under paragraph (e)(1) of this section is not treated as a tax imposed by chapter 1 of the Internal Revenue Code for purposes of determining the amount of any credit (other than the earned income credit) allowable under part IV, subchapter A, chapter 1 of the Internal Revenue Code.

[T.D. 7683, 45 FR 16175, Mar. 13, 1980. Redesignated by T.D. 8448, 57 FR 54923, Nov. 23, 1992; T.D. 9045, 68 FR 10656, Mar. 6, 2003]

Notes of Decisions

Cited in 8 cases, 1993–2016 · leading case: Jones v. Comm'r, 66 T.C.M. 368 (Tax Ct. 1993).

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Jones v. Comm'r, 66 T.C.M. 368 (Tax Ct. 1993). · cites it 4× “, provides: Earned income includes compensation excluded from gross income, such as disability income excluded under section 105(d) , the rental value of a parsonage exclude under section 107 , and the value of meals and lodging furnished for the *375 convenience of the employer…”

Morris v. Comm'r, 2016 T.C. Summary Opinion 6 (Tax Ct. 2016). · cites it 2× “The term "qualifying child" is defined in section 32(c)(3)(A) to mean a qualifying child of the taxpayer as defined in section 152(c) (determined without regard to whether the child provided over one-half of the qualifying child's support).”

Neff v. United States, 43 Fed. Cl. 659 (Fed. Cl. 1999). · cites it 3× “§ 32 (c)(2)(A) (1994); see also 26 C.F.R. § 1.32-2 (c)(2) (1996). Plaintiffs contend that quarters and subsistence allowances are not compensation.”

Diaz v. Comm'r, 2004 T.C. Memo. 145 (Tax Ct. 2004). · cites it 2× “*149 One of the conditions is that, in the case of an individual who is married, a joint return with the individual's spouse must be filed for the year for which the credit is claimed.”

Greene v. Comm'r, 2010 T.C. Summary Opinion 66 (Tax Ct. 2010). · cites it 2× “Therefore for 2006, because petitioner had no qualifying children and because his adjusted gross income of $ 21,133 was greater than the allowable income ceiling of $ 12,120, petitioner is ineligible for the earned income credit.”

Camarillo v. Comm'r, 2011 T.C. Summary Opinion 53 (Tax Ct. 2011). · cites it 2× “Earned income for purposes of the EITC includes wages and net earnings from self-employment.”

McLeod v. Comm'r, 2012 T.C. Summary Opinion 75 (Tax Ct. 2012). · cites it 2× “32(c)(2); sec. 1.32-2(c)(2), Income Tax Regs.”

Puerta v. Comm'r, 2012 T.C. Summary Opinion 93 (Tax Ct. 2012). · cites it 2× “The $17,550 of unemployment compensation that petitioner received does not qualify as earned income. See Jones v. Commissioner , T.”

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