The Earned Income Tax Credit in Colorado

Learn More about the Earned Income Tax Credit

EITC and Social Security Numbers

Who needs a Social Security number?

To claim the EITC, valid Social Security numbers must be provided for everyone listed on the tax return, including infants born before December 31, 2010. Only valid Social Security numbers issued to U.S. citizens or Social Security numbers issued to non-citizens who have permission to work legally in the United States are acceptable.

To claim the Child Tax Credit, workers and qualifying children must have either a valid Social Security number or an Individual Taxpayer Identification Number (ITIN).

The IRS verifies the Social Security number of every adult claiming the EITC, as well as the Social Security number of every child in families claiming the EITC, before it sends out EITC payments. Similar verification is conducted for Child Tax Credit claims. The IRS also checks to make sure that no child is claimed more than once.

The processing of a claim for the EITC or Child Tax Credit and the receipt of any refund will be delayed if the tax return or Schedule EIC is incomplete or contains incorrect information. Workers who file paper returns with missing or mismatched Social Security numbers will be sent a notice by the IRS stating that the return was incomplete and requesting that the missing information be mailed in. This can delay processing several weeks. Electronically-filed returns will be rejected by the IRS computer if a Social Security number (or ITIN) is missing or the name and number do not match. A corrected return must then be filed as a paper return.

It also is important to be sure that each name and Social Security number is recorded on the tax return exactly as it appears on the person's Social Security card. For example, if a woman records her married name on the tax return, but her Social Security card bears her maiden name, the discrepancy will need to be resolved before the tax return can be processed. (To avoid such an error, the woman can apply to the Social Security Administration to have her name changed on her Social Security card. Correcting this discrepancy also will help ensure that Social Security taxes are being deposited in the proper account.)

Workers who don't have Social Security numbers for their children by the tax-filing deadline can still get the EITC or Child Tax Credit by:

Filing their tax return without claiming the credits and then, after receiving the Social Security number, filing an "amended return" (Form 104OX) and attaching Schedule EIC (and Form 8812 if required for the Child Tax Credit), OR
Filing Form 4868 to request an extension on their tax-filing deadline to August 15.

To have an application for a Social Security number sent to your home, call 1-800-772-1213. Or call the Social Security Administration to find out how to apply.

EITC and Non-Traditional Families

EITC and Child Tax Credit eligibility rules give custodial parents priority in claiming the EITC if other family members who live with the child could also claim the credit. Beginning in 2005, these rules also apply to claims for the Child Tax Credit. A working custodial parent can claim his or her child for the EITC or Child Tax Credit (and as a dependent) even if the parent and child are living with another relative who earns more than the parent.

What are the rules about filing status?

To get the EITC, workers can file as: "single," "head of household" or "married filing jointly." But the EITC is not available to taxpayers who file as "married filing separately." This requirement that married workers file a joint tax return does not apply to claims for the Child Tax Credit -- they may file separately. However, if one spouse claims a child as a dependent, the other spouse cannot claim the same child for the Child Tax Credit.

What if parents are separated but not divorced?

Parents who are separated but not divorced often file as "married filing separately." But if they file this way, neither parent can claim the EITC. (As noted above, a claim for the Child Tax Credit could be made by one spouse filing separately.) Separated parents have the option of filing as "married filing jointly." If they do so, they can claim the EITC.

In addition, there is one situation in which a separated parent can claim the EITC but not have to file jointly with the other parent -- 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. This option can be important, for example, to workers who are victims of domestic violence or whose spouse is not cooperative.

What if the parents in a family are divorced?

If parents are divorced, the parent with whom the child lived for more than half the year is entitled to file for the EITC, regardless of which parent claims the child as a dependent. If both parents lived with the child for more than six months, either parent could claim the EITC, and the parents should decide which one will. However, if each parent separately claims the child for the EITC, the IRS will determine which parent lived the longest with the child and will deny the claim filed by the other parent. If the child lived with both parents for the same amount of time during the year, then the parent with the highest adjusted gross income is entitled to the EITC.

Note: 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 Child Tax Credit if he or she is permitted to claim the child as a dependent by divorce or separate maintenance agreement. (In these cases, the custodial parent must sign IRS Form 8332, "Release of Claim for Child of Divorced or Separated Parents," and the form must be attached to the tax return of the non-custodial parent). Note that even though the non-custodial parent claims the Child Tax Credit, an eligible parent who lives with the child more than six months of the year remains entitled to claim that child for the EITC.

What if both parents and their child live together, but the parents are not married?

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 Child Tax Credit, if both are otherwise eligible. Since they are unmarried, they do not file a joint return. However, if each parent separately claims the EITC and Child Tax Credit, the IRS will award the EITC based on which parent lived with the child the longest and deny the claim of the other parent. If the child lived with both parents for the same amount of time during the year, then the parent with the highest adjusted gross income is entitled to both the EITC and Child Tax Credit.

What about a three-generation household: a grandparent, parent and child?

In a three-generation household, only one person can claim the EITC and Tax Credit, even if more than one family member works and is otherwise eligible. For both the EITC and Child Tax Credit, a working parent living for more than six months of the year with his or child has the priority to claim the EITC. If the parent chooses not to claim the EITC or Child Tax Credit, an eligible grandparent may claim these credits. (In a household with no working parent and more than one relative who could claim a child, relatives may decide who will claim the EITC. However, if more than one worker claims the same child, the IRS will award the EITC to the person with the highest adjusted gross income.) The same child cannot be claimed by one relative for the EITC and another relative for the Child Tax Credit. A child may be claimed as a qualifying child for tax benefits by only one taxpayer (with the exception noted earlier of a non-custodial parent permitted to claim the child as a dependent and for the Child Tax Credit by a divorce or separate maintenance agreement).

What about child support?

Child support payments a parent receives do not count as income when determining eligibility for the EITC or Child Tax Credit or the amount of either credit.

What about foster families?

For purposes of the EITC and Child Tax Credit, a foster child must be placed with the worker by an authorized placement agency, such as a licensed foster care agency, state agency or court. Such children must live with the worker for more than half of the tax year and meet the other requirements for a qualifying child.

Foster care payments generally do not count as income when determining eligibility for the EITC or Child Tax Credit. Beginning in 2005, workers do not need to meet a support test to claim a child as a dependent or for the Child Tax Credit -- the same rule as for the EITC. Under previous law, foster care payments could affect a foster parent's ability to claim a foster child as a dependent and for the Child Tax Credit (some foster parents also mistakenly thought this jeopardized their EITC claim.)

EITC and Child Tax Credit: Eligibility for 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 food stamps and SSI to many legal immigrants did not apply to the EITC. But there are rules to claim the EITC that are specific to immigrant workers. In order to claim the EITC, immigrant workers, their spouses, and children listed on 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, and
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, meaning they have a "green card" (I-551 card). However, many legal immigrants who do not yet have their "green cards" may still be resident aliens for tax purposes. For example, the following immigrants might qualify for the EITC (and the Child Tax Credit) 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.
Applicants for these and other immigration statuses who have legal work authorization and Social Security numbers.

Can immigrant workers get the Child Tax Credit?

The rules for immigrant workers to claim the Child Tax Credit 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.

Remember! Immigrant workers' children must have lived with them in the United States for more than six months of the year to be considered qualifying children for the EITC or Child Tax Credit. Also, the worker's main home must be in the United States.

Can immigrant workers who obtain legal work status claim the EITC for a previous year?
Workers who otherwise met all the EITC eligibility requirements in previous years, and later obtain legal work status from the U.S. Citizenship and Immigration Services (USCIS), may be able to claim the EITC for up to three previous years. A worker's spouse or qualifying children, if any, must also have legal work status. After receiving legal work status from the USCIS, the worker, spouse and qualifying children must obtain Social Security numbers. Such workers may claim the EITC by amending their tax return for the previous year, even if they had been denied the EITC in that year because they had not yet obtained a valid Social Security number. Or workers can file an original return for the previous year if they had not already done so. For more information, contact the IRS at (202) 622-6060.

Does getting the EITC or Child Tax Credit cause problems for immigrant workers?
The EITC and Child Tax Credit do not create "public charge" problems for immigrant workers. Receiving these credits is not considered an indication that the immigrant is unable to support him- or herself financially.

In general, information on a tax return is 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.

For more information about which immigrant workers qualify for the EITC, how to obtain Social Security numbers and other immigrant tax issues, call the National Immigration Law Center at (213) 639-3900.

Can Military Personnel Claim the EITC and Child Tax Credit?

Overseas assignments:

Members of the military assigned overseas may wonder about their eligibility for the EITC or Child Tax Credit. Military personnel can claim these credits 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 their qualifying children while stationed on active duty outside the U.S. can be eligible for the EITC and Child Tax Credit. Even if their qualifying children remain in the U.S., the children may be claimed for the EITC. Military couples living apart due to military assignment must still file a joint return to receive the EITC.

An individual in the military under age 19 may be claimed as a qualifying child for the EITC. If such an individual is temporarily absent due to an overseas military assignment, he or she may be considered a qualifying child as long as he or she intends to return home at the end of the military assignment.

Combat Pay

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 Child Tax Credit 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 income above EITC eligibility levels, or the added income might reduce the amount of the EITC. Under these circumstances a family would not want to count the combat pay. But in families with little or no income, counting combat pay is likely to result in a larger EITC. Combat pay counted for the EITC (or Child Tax Credit) remains non-taxable income.

The treatment of combat pay also affects figuring eligibility for the Child Tax Credit. Combat pay must be counted as income for the Child Tax Credit. For the Child Tax Credit, counting combat pay will always work to the family's advantage, enabling more military families to qualify.

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 Child Tax Credit 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 further information on EITC and Child Tax Credit rules for military personnel, see IRS Publication 3, Armed Forces Tax Guide.

EITC/Child Tax Credit and College Financial Aid

College students who work and are raising children may be eligible to claim the EITC and Child Tax Credit. Parents of full-time students under age 24 (or students of any age who have total and permanent disabilities) may also be able to claim the EITC. Students between ages 25 and 64 who are not raising children and who work may also be eligible for the EITC.

Non-taxable scholarships and grants are not considered income in determining eligibility for the EITC; taxable grants and scholarships also are not considered “earned income,” but are included in determining “adjusted gross income,” which may affect eligibility for the EITC and Child Tax Credit.
The EITC is counted as family income in determining financial aid eligibility, but Child Tax Credit refunds are not counted as family income. However, for many low-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 them to reach the threshold of income 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.

For information on which scholarships and grants are taxable or non-taxable, call the IRS at 1-800-829-1040.