The following answers some of the frequently asked questions about tax credits and outreach.
To claim the EITC, each filer listed on the tax return and any child claimed for the credit must have valid SSNs. This includes infants born before December 31 of the year. Only valid SSNs issued to U.S. citizens or SSNs issued to non-citizens who have permission to work legally in the United States are acceptable.
For the CTC:
To claim the CTC, workers and qualifying children must have either a valid SSN number or an Individual Taxpayer Identification Number (ITIN).
Workers who don’t have Social Security numbers for their children by the tax filing deadline can still get the EITC or CTC by:
- Filing their tax return without claiming the credits and after receiving the SSN, filing an amended return and attaching Schedule EIC (and Schedule 8812 if required for the CTC).
- Filing Form 4868 to request an extension on their tax-filing deadline to October 15.
To apply for a Social Security number, complete an application online, call 1-800-772-1213 to request one by mail, or call the Social Security Administration office in your state to find out how to apply.
Income: Congress enacted legislation in January 2013 which permanently excludes any federal tax refund from counting as income in determining eligibility or the amount of benefit, for any federally-funded public benefit program. This includes programs partially funded by federal dollars. The refund can include benefits from the EITC, CTC, other tax credits, or refund of a filer’s other withheld income tax.
Asset/ Resource: The legislation also provides that refunds that are saved by a tax filer do not count against the resource limits of any federally-funded public benefit program for 12 months after the refund is received.
Safe harbor: Tax credit refunds deposited in certain types of Individual Development Accounts (IDAs) do not count as a resource in determining eligibility for federally-funded public benefit programs, including state cash assistance (TANF) programs. For more information see the “2002 Federal IDA Briefing Book.”
Workfare programs: Some welfare recipients are required to participate in “work experience” and “community service programs” (often called “workfare”) in exchange for their cash assistance benefits. These benefits are not counted as income to determine eligibility for the EITC or CTC.
Subsidized jobs: Current or former cash assistance recipients who are employed in jobs where employers are subsidized through state welfare block grants or other government programs do earn wages that count in determining eligibility for the EITC and CTC.
A parent not living with his or her child for more than half the year may be eligible for the smaller EITC for workers without qualifying children. That parent may also claim the CTC if he or she is permitted to claim the child as a dependent by a divorce or separation agreement. (In these cases, the custodial parent must sign IRS Form 8332, “Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent,” and the form must be submitted with the tax return of the non-custodial parent.) Even though the non-custodial parent claims the CTC, an eligible parent who lives with the child more than six months of the year remains entitled to claim that child for the EITC.
|Filing Status||Gross Income|
|Head of Household||$13,400|
|Married Filing Jointly||$20,800|
|Married Filing Separately||$4,050|
|Qualifying Widow with Dependent Child||$16,750|
Note: Income requirements are slightly higher for taxpayers over 65.
Taxpayers with income below these levels may want to file a tax return even though they are not required to do so to get back federal income tax withheld from their pay or to claim refundable tax credits (if they are eligible) such as the EITC, CTC, American Opportunity Tax Credit, and the Premium Health Tax Credit.
Both transcripts can be obtained for the current calendar year or prior years for free by submitting Form 4506-T, “Request for Transcript of Tax Return.” If necessary, a photocopy of a tax return (with all attachments including W-2 forms) costs $50 and can be requested with Form 4506, “Request for Copy of Tax Return.” Transcript requests should not be made until six weeks after the initial tax return was filed. It takes about 5 to 10 work days to receive the transcript from the IRS. Transcripts can also be obtained online.
Amended returns cannot be completed electronically and should be mailed with the completed Schedule EIC and/or Schedule 8812 to the IRS Service Center listed in the 1040X Instructions. There is no charge or penalty for filing an amended return. Some VITA sites can file prior year returns.
A tax return should not be amended until after it has been processed by the IRS — about six weeks for a return sent by mail and two weeks for a return sent electronically.
Workers who did not file a return for a previous year and discover they were eligible for the EITC or CTC must file a separate return for each year in which they qualified. Download prior-year tax forms and instructions from the IRS website.
- His or her EITC or CTC may be enough to cover the taxes owed.
- There is no late filing penalty, unless the worker owed income tax in the prior year. Any tax still owed the IRS will be deducted from the worker’s refund.
- The IRS is usually willing to work out payment plans for back taxes.
- The worker may be able to make an “offer in compromise” that is less than the tax bill.
Exception: Workers whose EITC claim was disallowed in a previous year, and who now claim they are eligible, must include Form 8862, “Information to Claim Earned Income Credit After Disallowance,” with their tax return to submit a new claim.
- The parent who lived with the child the longest during the year is eligible.
- Highest AGI
- The parent with the highest AGI is eligible if residency is the same for each parent.
Two or more eligible relatives:
- Highest AGI
- The relative with the highest AGI may claim the child, if the relative’s income is higher than any eligible parent’s income.
- If a parent is ineligible to claim a child, the relative with the highest AGI is eligible.
If an eligible worker learns that an ineligible filer already claimed a child for the EITC and CTC, the eligible taxpayer can dispute the claim. Low Income Taxpayer Clinics, Legal Aid Society offices, or some VITA sites can assist with this process. Alternatively, search for legal assistance here.
In addition, an immigrant must be a “resident alien for tax purposes” for the entire tax year to claim the EITC. An immigrant who was a non-resident alien at any time during the year cannot claim the EITC unless he or she was married to a U.S. citizen or a resident alien as of December 31 of the tax year, files a joint tax return with the spouse, and chooses to be treated as a resident alien for the entire year. For more information on how resident alien status is determined, see IRS Publication 519, “U.S. Tax Guide for Aliens.”
Immigrants who are “resident aliens for tax purposes” may be legal permanent residents, and have a “green card” (I-551 card). Many legal immigrants who do not have their “green cards” yet may still be resident aliens for tax purposes. For example, the following immigrants might qualify for the EITC (and the CTC) if they and their family members have legal work authorization and Social Security numbers:
- Amnesty temporary residents and amnesty family members granted “Family Fairness” or “Family Unity” status;
- Refugees, asylees, and those granted Temporary Protected Status; and
- Applicants for these and other immigration statuses who have legal work authorization and Social Security numbers.
Immigrant workers’ children must live with them in the U.S. for more than six months of the year to be considered qualifying children for the EITC or for the CTC. Also, the worker’s main home must be in the U.S.
Workers cannot claim the CTC retroactively by amending their tax return for the previous year (or filing an original return if they did not do so) for a qualifying child who later obtains an ITIN or Social Security number.
Combat pay must be counted as income for the CTC. For the CTC, counting combat pay will always work to the family’s advantage, enabling more military families to qualify.
For more information on EITC and CTC rules for military personnel, see IRS Publication 3, “Armed Forces’ Tax Guide.”
DOMESTIC VIOLENCE SURVIVORS
- the survivor and spouse lived apart for the last six months of the year;
- the child lived with the survivor for more than half of the year; and
- the survivor paid more than half the cost of maintaining the household for the year and is eligible to claim the child as a dependent.
Additionally, there is help to manage and negotiate tax liability. Low-Income Taxpayer Clinics (LITCs) and the Taxpayer Advocate Service can help survivors resolve concerns with the IRS.
COLLEGE FINANCIAL AID
GRANDPARENTS RAISING GRANDCHILDREN
For resource or asset tests, EITC and CTC refunds are not counted for 12 months after the month the refund is received.
States may provide welfare cash assistance for the support of a child under the care of a relative. The EITC and CTC do not affect these “child only” welfare benefits.
Foster Child – A foster child is a child who is placed with a foster parent by an authorized government or private placement agency, or court. A foster child is eligible to be claimed for the EITC and CTC if he or she satisfies all of the eligibility requirements of a qualifying child.