Helpful Definitions and Acronyms for the EITC

 

Adopted Child – An adopted child is always treated as your own child. This term includes a child who was lawfully placed with you for legal adoption.

AGI or Adjusted Gross Income – AGI includes all your gross income minus certain deductions. You use your AGI to find out if you qualify for the EITC and for finding the amount of the EITC you may receive. Find the amount of your AGI on line 8 of Form 1040 or Form. 

ATIN, Adoption Taxpayer Identification Number – IRS issues an ATIN as a temporary  taxpayer identification number for a child when the adopting parents do not have and cannot get an SSN, Social Security number, until the adoption is final. 

Authorized Placement Agency – An authorized placement agency may include one of the following:

  • A state
  • The District of Columbia
  • A possession of the United States
  • A foreign country
  • An Indian tribal government
  • An agency or organization that is authorized by a state, the District of Columbia, a possession of the United States, a foreign country, or an Indian Tribal Government to place children in foster care
  • A political subdivision of any of these authorized to place children in foster care

Child Who Was Kidnapped – You may be able to claim the EITC for a child who was kidnapped by a non-family member. The IRS treats a kidnapped child as living with you for more than half of the year if the child lived with you for more than half of the part of the year before the date of the kidnapping.

CTC – Child Tax Credit – Many people who have a qualifying child for purposes of the EITC also qualify for the CTC. If your child is younger than age 17, find out if you qualify for CTC. For more information, see Publication 972.

Child with Disabilities – You may be able to claim a child who is any age and permanently and totally disabled if the child meets the relationship test and all other tests to be your qualifying child for purposes of the EITC. The IRS considers a child permanently and totally disabled if both of the following are true:

  1. The child cannot engage in any substantial gainful activity because of a physical or mental condition.
  2. It is medically determined that the condition has lasted or can be expected to last continuously for at least a year or to lead to death.

For more information, see our page, Disability and the Earned Income Tax Credit.

e-file – For faster and accurate processing of your tax return, you can file electronically by yourself or through your return preparer using the IRS e-file program.

Earned Income   

EIC – See EITC below.

EITC – The earned income tax credit which is sometimes called EIC or earned income credit is a refundable tax credit for eligible people who work and have income less than specified amounts. The amount of the credit is based on your income, filing status, and the number of qualifying children you claim, if any.   

EITC Assistant – Find out if you are eligible for the EITC by answering questions and providing basic income information. The EITC Assistant also estimates the amount of your EITC. 

Eligible Foster Child – To be a qualifying child for the EITC, the foster child must be placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. See "Authorized Placement Agency" above.

Free File – If you prepare your own return, try Free File to prepare and e-file your tax return for free using commercially available tax preparation software. You can also use the free fillable forms option to complete your return.  

ITIN, Individual Taxpayer Identification Number – The IRS issues an ITIN, Individual Taxpayer Identification Number, to someone who is not eligible for an SSN, Social Security number, but needs a tax identifying number for banking, filing a tax return, or other tax reporting needs. 

LITC, Low Income Taxpayer Clinics – An LITC serves those who have a problem with the IRS and have low income. LITCs are independent from the IRS. Most provide representation before the IRS or in court on audits, tax collection disputes, or other issues for free or for a small fee. If an individual’s native language is not English, some clinics provide multilingual information about taxpayers' rights and responsibilities. 

Publication 596, Earned Income Credit – This IRS tax booklet has detailed information on everything you need to know about the EITC: requirements, definitions of terms, dollar limits, credit amounts, examples and worksheets to calculate the EITC. This booklet is also available in Spanish.

Qualifying Child – A child must pass four tests to be a qualifying child for the purposes of the EITC: age, relationship, residency and joint return. 

Schedule EIC– To claim the EITC with a qualifying child, you must complete and attach this form to your tax return. 

SSN, Social Security Number – You may need a Social Security number to get a job, collect Social Security benefits or  receive some other government benefits. You, your spouse if married filing a joint return, and any qualifying child listed on your Schedule EIC need the required Social Security that was issued on or before the due date of the return (including extensions). An SSN that is marked “Not Valid for Employment” and that is issued solely to allow the recipient to obtain a federally funded benefit, such as Medicaid, does not meet the requirements of an SSN for the EITC.

Statutory Employee – The IRS treats certain workers who meet the independent contractor rules as employees for employment tax purposes by statute. These workers are called statutory employees. You are a statutory employee if you receive a Form W-2 on which the “Statutory employee” box (box 13) is checked. You report your income and expenses as a statutory employee on Schedule C or C-EZ (Form 1040).

TANF, Temporary Assistance for Needy Families – A social program that provides assistance and work opportunities to needy families by granting states the federal funds to develop and implement their own welfare programs. For more information on TANF and receiving TANF benefits, check the TANF site and then look at information for the state in which you live.

TCE, Tax Counseling for the Elderly – The TCE Program offers free tax help for all, with priority assistance to people who are 60 years of age and older. TCE sites specialize in questions about pensions and retirement issues relevant to seniors. IRS-certified volunteers who provide tax counseling are often retired individuals associated with non-profit organizations that receive grants from the IRS. For more information on the program or to find sites, see our Free Tax Return Preparation page.

TY, Tax Year – For most people, the tax year runs from January 1 to December 31 of the same year. A “tax year” is your period for keeping records of income and expenses, for determining your filing status, etc. If your tax year is the calendar year, January 1, to December 31, you can file your tax return any time after December 31 of the tax year and it’s due April 15 (unless the 15th is a holiday or weekend) of the following year. For example, for most people, tax year 2019 runs from January 1, 2019 to December 31, 2019 and the tax return is due April 15, 2020.

VITA, Volunteer Income Tax Assistance – The VITA Program offers free tax help to people with income of $56,000 or less. IRS-certified volunteers prepare returns for free and help answer your tax return filing questions. For more information on the program or to find sites, see our Free Tax Return Preparation page.

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