Frequently Asked Questions

The following answers some of the frequently asked questions about tax credits and outreach.

ELIGIBILITY

Who needs a Social Security number (SSN)?
For the EITC:

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).
    OR
  • 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.

Will getting the EITC or CTC lower other government benefits? Could someone lose benefits altogether?
Generally, no. Public benefit programs have income and resource/asset tests.

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.”

Can people who work and also get cash assistance still claim the EITC or CTC?
Yes. As long as they earn wages and meet the income and other eligibility requirements for the credits. Cash assistance benefits are not considered in determining eligibility for tax credits.

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.

Can Native Americans claim the EITC and the CTC even if they are exempt from federal income tax?
Generally, Native Americans are not exempt from federal income tax on their earnings. Native Americans are only exempt if a treaty between a tribe and the U.S. government, or a U.S. statute, specifically excludes certain income from taxation. If the specified income is exempt from income tax, it is not considered “taxable earned income” for the EITC and CTC and is not counted in figuring eligibility for the credits.
What are the tax filing status rules to claim the EITC and CTC?
Workers who file tax returns as “single,” “head of household,” or “married filing jointly” can claim the EITC. Workers who are separated but not divorced and file as “married filing separately” cannot get the EITC. Taxpayers can claim the CTC as “married filing separately.”
Are there any exceptions for workers who wish to file as “married filing separately” to claim the EITC?
There is one situation in which a separated parent can claim the EITC without having to file a joint return. The parents must have lived apart for the last six months of the year and their child must have lived with one of them for more than half of the year. Also, the parent now living with the child must have paid more than half the cost of maintaining the household for the year and be able to claim the child as a dependent. Under these circumstances, that parent is considered unmarried for tax purposes and can file as “head of household.” That parent may claim the EITC.
How do divorced parents claim a child for the EITC and CTC?
If parents are divorced, the parent who the child lived with for more than half the year can claim the EITC, regardless of which parent claims the child as a dependent. If both parents lived with the child for more than six months, the parents should decide who will claim the EITC.

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.

Can unmarried parents who live together with their child claim the tax credits?
If the parents are not married and each lived with the child for more than six months, they may choose which parent claims the EITC and CTC, if both are otherwise eligible. Since they are unmarried, they do not file a joint return.
Are there any exceptions to the rule that the worker and child must live together for more than half the year?
If a worker or child is away from home temporarily due to a special circumstance, the absence is treated as time lived at home. Special circumstances include illness, school attendance, detention in a juvenile facility, business, vacation, military service, and separation in a disaster.

TAX FILING

Who is required to file a tax return?
People with income greater than the following amounts in 2017 must file a federal income tax return:

Filing Status Gross Income
Single $10,400
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.

What is investment income?
Investment income is interest and dividends earned from investments such as stocks, bonds, capital gains, and residential rental property. It does not include the actual amount held in savings or investments.
Do child support payments count as income for the EITC and CTC?
Child support payments a parent receives do not count as income when determining eligibility for the EITC or CTC.
What if a worker no longer has a copy of the previous tax return?
If tax documents are lost, a transcript or photocopy of a tax return can be obtained through the IRS. Tax Return Transcripts provide line item information from an original tax return along with any forms or schedules submitted. This information is sufficient in most cases to file one’s taxes. A Tax Account Transcript supplies details such as marital status, type of return filed, adjusted gross income (AGI), taxable income, and any adjustments made to the return after submission.

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.

What if a worker no longer has his or her W-2 or 1099 forms?
Workers can file a tax return and claim tax credits even if they misplaced or did not receive their W-2 or 1099 forms. If workers cannot get a copy of their documents from their employer, they can complete Form 4852, “Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.” This form requests information about wages and taxes withheld, so it is helpful if workers have documentation, such as a final pay stub, to complete it. If documentation is not available, workers can estimate their earnings to complete the form. Some VITA sites can help with this process.
What if a worker was eligible for the EITC or CTC in past years but didn’t claim it?
Workers can file for tax credit refunds for up to three years before the current tax year. An eligible worker who previously filed a tax return but did not claim the EITC or CTC can change a previous return by filling out Form 1040X, “Amended U.S. Individual Income Tax Return.” Workers claiming a child for a previous year must also submit the Schedule EIC and/or Schedule 8812 for that year.

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.

What happens if a worker files for a prior year and the IRS finds out that taxes are owed?
The worker must pay whatever is owed. But:

  • 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.
Will the IRS require additional information beyond what a worker provides with his or her tax return?
Generally, the IRS will not require any additional information. If information provided on the tax return or Schedule EIC seems questionable, the IRS may request additional documentation to verify the EITC or CTC claim. In such cases, the IRS will notify the filer of the type of documentation that must be submitted. Filers claiming the EITC and CTC should not mail any additional documentation with their tax returns unless requested by the IRS. If additional information is requested, filers need submit only the documents specified.

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.

How do self-employed workers get the EITC and the CTC?
Self-employment income is considered earned income for the tax credits. Self-employed workers will need to use Form 1040 to file their tax return and also submit Schedule C, “Profit or Loss from Business,” (or Schedule C-EZ) and Schedule SE, “Self Employment Tax,” if their self-employment income is more than $400.
What happens if two people claim the same child for the EITC or CTC?
The IRS will only allow one person to claim a child for the EITC and CTC. If more than one person claims the same child for the credits, the IRS will consider residency with the child and adjusted gross income (AGI) of filers to determine who is eligible.

Unmarried parents:

  • Residency
    • 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.

IMMIGRANT WORKERS

Can immigrant workers get the EITC?
Many legal immigrants who are employed can get the EITC. Previous changes in federal law that denied public benefits such as SNAP (food stamps) and SSI to many legal immigrants did not apply to the EITC. Immigrant workers, their spouses, and children listed on the Schedule EIC must each have valid Social Security numbers that permit them to work legally in the United States. Individual Taxpayer Identification Numbers (ITIN) issued by the IRS to non-citizens and non-work Social Security numbers issued to applicants or recipients of federally funded benefits programs cannot be used to claim the EITC.

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.
Can immigrant workers get the CTC?
Yes. The rules for immigrant workers to claim the CTC are not as restrictive as for the EITC. Workers and their qualifying children must be either U.S. citizens or resident aliens living in the U.S. and have either a valid Social Security number (including a non-work SSN) or an ITIN.

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.

Can immigrant workers who obtain legal work status claim the EITC for a previous year?
No. As of 2016, workers who obtain legal work status from the U.S. Citizenship and Immigration Services (USCIS) cannot retroactively claim the EITC by amending their tax return for the previous year (or filing an original return if they did not do so), even if they met all other eligibility requirements in previous years. This also applies to a worker’s spouse and qualifying children, if any.
Does getting the EITC or CTC cause “public charge” problems for immigrant workers?
The EITC and CTC do not create “public charge” problems for immigrant workers. Receiving these credits is not considered an indication that an immigrant is unable to support him- or herself financially. Information on a tax return is considered confidential. The IRS cannot share individual tax return information with other government agencies, including the USCIS. There are exceptions in cases involving federal criminal or terrorism investigations or when the IRS thinks someone is breaking a tax law.

MILITARY PERSONNEL

Can members of the military claim the EITC and the CTC if they are overseas on assignment?
Yes, military personnel can claim the EITC and CTC whether they live in the United States or overseas. The IRS considers an individual assigned to an overseas tour of duty to be temporarily absent from the U.S. due to a special circumstance. The length of time the person is absent is treated as though he or she was in the U.S., as long as the individual plans to return to his or her main home in the U.S. at the end of the military assignment. Therefore, military personnel who live with qualifying children while stationed on active duty outside the U.S. can be eligible for the EITC and CTC. Even if their qualifying children remain in the U.S., the children may be claimed for the EITC. Military couples living apart due to a military assignment must still file a joint return to receive the EITC.
What do parents need to know about claiming a qualifying child who is in the military for the EITC?
An individual in the military under age 19 may be claimed as a qualifying child for the EITC. If the individual is temporarily absent due to an overseas military assignment, he or she still may be considered a qualifying child as long as he or she intends to return home at the end of the military assignment.
How is combat pay treated in determining eligibility for the EITC and CTC?
Military pay received in a combat zone is non-taxable earned income, but it is treated differently than other forms of non-taxable earned income for EITC and CTC purposes. Military personnel may choose to count combat pay when calculating their eligibility for the EITC if it is an advantage. For example, adding combat pay to a family’s other earnings might raise the family’s total earned income above EITC eligibility levels, or the added income might reduce the amount of the EITC. In these situations a family would not want to count the combat pay. In families with little or no other income, counting combat pay is likely to result in a larger EITC. Combat pay counted for the EITC (or CTC) remains non-taxable income.

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.

How are non-taxable military allowances counted in determining eligibility for the EITC and CTC?
Non-taxable military allowances for housing and subsistence — including meals and lodging furnished in-kind to personnel residing on military bases — are not considered earned income for EITC or CTC purposes. Such pay and allowances are indicated on W-2 forms, but are not added to regular wage income to calculate eligibility for the EITC. Veterans’ benefits and military retirement pay are not considered earned income.

For more information on EITC and CTC rules for military personnel, see IRS Publication 3, “Armed Forces’ Tax Guide.”

DOMESTIC VIOLENCE SURVIVORS

Can a survivor who is separated but not divorced claim the EITC?
Generally, married workers must file a tax return jointly to claim the EITC. There is one exception that allows a survivor who is separated to claim the EITC without having to file jointly with an abusive spouse. A survivor may be considered unmarried for tax purposes and file as “head of household” to claim the EITC if:

  • 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.
What if a survivor has lost tax documents?
If tax documents are lost, a transcript or photocopy of a tax return and information about wages and taxes withheld can be obtained through the IRS.
What if a survivor does not have a permanent address?
Domestic violence shelters or other service providers often allow survivors to use their address for tax purposes. Also, an Address Confidentiality Program (ACP), operated by the Secretary of State’s office or other local agency, may provide survivors with a substitute mailing address and mail forwarding services. To see if your state operates an ACP, view this list or search for “address confidentiality program” at www.USA.gov.
Will claiming tax credits compromise a survivor’s privacy?
Tax returns and return-related information are confidential and protected against unauthorized disclosure by the IRS. Trained community groups that operate VITA programs must follow confidentiality guidelines that prohibit disclosing a tax filer’s information to any other person or agency. Survivors can also consult their local domestic violence advocate to help identify the safest course to file tax returns based on individual circumstances.
Are there resources for survivors who have joint tax liability with an ex-abusive spouse?
There are tax rules that can help if a survivor has a difficult tax situation that involves an abusive spouse. Survivors may be relieved of joint tax liability if they meet the eligibility requirements under Innocent Spouse Relief or Injured Spouse Relief. For more information on filing for relief, see “Injured or Innocent Spouse Tax Relief.”

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

How does receiving college financial aid affect one’s eligibility to claim the EITC and CTC?
Non-taxable scholarships and grants are not considered income in determining eligibility for the EITC or CTC. Taxable grants and scholarships are not considered “earned income,” but are included in determining “adjusted gross income,” which may affect eligibility for the EITC and CTC.
Will claiming the tax credits impact the amount awarded in a college financial aid package?
The EITC is counted as family income in determining financial aid eligibility and CTC refunds are not. For many lower-income students who work, or their parents, the EITC will have no effect on financial aid amounts or eligibility. Adding the tax credit refund amounts to other income often will not cause income to reach the threshold at which the student or family is required to contribute to the cost of education. For more information, contact your college’s financial aid office.

GRANDPARENTS RAISING GRANDCHILDREN

Does a grandparent need to have legal guardianship to claim a grandchild for the EITC and CTC?
No, legal guardianship of a child is not a requirement to claim the tax credits. Eligibility is based on income, the age of the grandchild, and whether the grandchild lived with the grandparent for more than six months of the year in total. As long as the grandparent meets the general requirements for these tax credits, the grandparent can claim the EITC and CTC.
Who is eligible for the EITC and CTC in a three-generation household when both a child and parent live with the grandparent of the child?
In a three-generation household, only one tax filer can claim the EITC and CTC, even if more than one family member works and is otherwise eligible. A working parent living for more than six months of the year with his or her child has priority to claim the tax credits. If the parent did not work or chooses not to claim the EITC or CTC, an eligible grandparent may claim these credits, as long as his or her adjusted gross income is greater than the parent’s.
In a three-generation household, what happens if there is a change in the parent’s ability to raise the child due to unemployment, loss of income, military deployment, or divorce?
The parent is still eligible in these circumstances to claim the child for the tax credits if he or she lived with the child for more than six months of the year and had earned income. Time spent on a military deployment is considered the same as residence with the child, so soldiers do not lose eligibility for tax benefits.
In a three-generation household, what happens if the parent can no longer work and raise the child due to illness, disability, or incarceration?
If the parent has been absent or has not worked, a grandparent who lived with the child for more than six months total during the year and has earned income may qualify to claim the credits. Income from retirement pensions and Social Security benefits are not earned income for the EITC and CTC.
Will claiming the EITC and CTC affect eligibility for other benefits?
EITC and CTC refunds won’t count as income when applying for or renewing any federally-funded benefits, such as SNAP (food stamps), TANF, SSI, Medicaid, or housing programs. EITC and CTC refunds do not affect Social Security or Medicare benefits.

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.

Are there other tax credits that can benefit grandparents?
Some grandparents may be eligible for the Child and Dependent Care Credit or the Credit for the Elderly or the Disabled. To claim the Credit for the Elderly or the Disabled, a tax filer must be age 65 or older, or retired on permanent and total disability and have taxable disability income.

FOSTER PARENTS

What are the eligibility rules for foster families to claim the EITC and CTC?
The same income, age, and residency rules for the tax credits apply to foster families. A foster parent must have earned income during the year. A foster child must be placed with a foster family by an authorized government or private placement agency, such as a licensed foster care agency, state agency, or court and live with the foster parent for more than half the year. In addition, a foster child must be under 19 at the end of the tax year or any age of the child has permanent and total disabilities. The foster child does not have to be in the foster parent’s home at the end of the year to be claimed.
Does a foster parent need to have legal guardianship to claim a foster child for the EITC and CTC?
No, legal guardianship of a child is not a requirement to claim the tax credits. Eligibility is based on income, the age of the child and whether the child lived with the foster parent for more than six months of the year in total.
Can foster parents claim foster youth who transition out of the foster care system?
Unless the child is otherwise related to the foster parent (i.e. grandchild, niece, nephew, or sibling), the child can no longer be claimed for the EITC or CTC. If the transitioning youth qualifies for a state’s “foster care to 21” program, he or she could still be claimed for the EITC.
Do foster payments count as income when determining eligibility for the tax benefits?
Foster care payments generally do not count as income when determining eligibility for the EITC or the CTC. Instead, foster care payments are considered “reimbursement” to a foster parent for volunteering to care for a foster child. For the CTC, the child’s foster care payments or other income cannot provide more than half of the child’s support.
What is the difference between an adopted child and a foster child for the EITC and the CTC?
Adopted child – An adopted child includes a child who is lawfully placed with a guardian for legal adoption. An adopted child, or a child in the process of being adopted living with the worker, is eligible to be claimed for these tax credits if the child satisfies all of the eligibility requirements of a qualifying child. (For the EITC, the child must have a Social Security number; a child with a temporary Adoption Taxpayer Identification Number – ATIN – can’t be claimed for the EITC.) An adopted child is treated the same as a qualifying child for purposes of tax credit eligibility.

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.

Are there other tax credits that foster parents and adoptive parents can claim?
Some foster and adoptive parents may be eligible to claim the Child and Dependent Care Credit. Additionally, adoptive families may qualify for the Adoption Tax Credit. This non-refundable tax credit can offset some of the costs incurred during the adoption process. In 2017, the credit is worth a maximum of $13,570. Allowable costs that count for the credit include adoption fees, court costs, attorney fees, medical expenses and travel expenses. The child must be under age 18 or any age if the child has a mental or physical disability. Adopting a child with special needs allows an adoptive parent to claim the full credit amount even if the parent did not spend that amount. For more information see IRS Form 8839, “Qualified Adoption Expenses” or visit the North American Council on Adoptable Children


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