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Question
I am lost as to how to properly prepare my 2012 personal taxes with regard to the EIC.  My husband and I are a missionary team along with our 2 children in Nicaragua (on temporary 90 day visas that have to be renewed).  Are we eligible for the Earned Income Credit?  I know that it states that your children must live with you for 6 or more months in the U.S., however it lists exceptions for temporary absences:

From IRS Doc 596: "Temporary absences. Count time that you or your child is away from home on a temporary absence due to a special circumstance as time the child lived with you. Examples of a special circumstance include illness, school attendance, business, vacation, military service, and detention in a juvenile facility."

Since we are receiving a 1099 from our congregation in the States and filing our 1099 without the Foreign Earned Income Credit and also paying SE taxes, wouldn't the time spent out of the U.S. be qualified as a special circumstance for "business"?

I just want to file our taxes properly and haven't had much luck finding qualified responses to our question.  Thank you for your time!

Answer
Dear Jill,

You are eligible for EIC since you do not claim benefits under section 911 (foreign earned income exclusion) and your principal place of abode (see http://www.taxesforexpats.com/expat-tax-advice/tax-advice.html#a3)  was United States.

Hope this helps,

I.J.Zemelman  

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IJ Zemelman, EA MBA

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I am an IRS-authorized EA and principal of a Tax Preparation firm focusing on U.S. Expatriates. We specialize in all tax issues faced by American citizens living abroad - such as foreign earned income, tax treaties, foreign spouse, etc. Visit our website - www.TaxesForExpats.com - for more information.

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18 years professional tax experience, 12 with expatriate taxes.

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Expatriate tax information on www.TaxesForExpats.com

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MBA from Zicklin School Of Business, IRS Enrolled Agent

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