Make Work Pay

Helpful Definitions and Acronyms

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

AGI – Adjusted Gross Income – A calculation that includes an individual's income, minus certain deductions, that is used in calculating the EITC. This is line 36 on Form 1040, line 21 on Form 1040A and line 4 on Form 1040EZ.

ATIN – Adoption Taxpayer Identification Number – A number issued by the Internal Revenue Service as a temporary taxpayer identification number for the child in a domestic adoption where the adopting taxpayers do not have and/or are unable to obtain the child's Social Security number (SSN). The ATIN is used by the adopting taxpayers on their federal income tax return to identify the child while final domestic adoption is pending.

Authorized Placement Agency – An agency of a state, political subdivision of a state or a tax-exempt organization licensed by a state; an Indian tribal government or an organization authorized by an Indian tribal government to place Indian children; or a court.

Child Who Was Kidnapped – Taxpayers may be able to claim the EITC on the basis of a child who was kidnapped by a non-family member. A kidnapped child is treated as having lived with the taxpayer for more than half of the year if the child lived with the taxpayer for more than half the part of the year before the date of the kidnapping. See Publication 596 for additional information.

CTC – Child Tax Credit – An income tax credit for people who have a qualifying child as defined by Publication 972.

Disabled Child (permanently and totally disabled) – A permanently and totally disabled child must meet both of the following tests:

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

e-file – IRS e-file enables taxpayers and tax professionals to file tax returns electronically. Taxpayers claiming the EITC may want to use e-file to submit their tax returns.

EITC – Earned Income Tax Credit – A tax credit for eligible people who work and have income less than specified amounts. The amount of the credit is based on income, filing status and number of qualifying children, if any.

EITC Assistant – A new online tool that helps taxpayers and tax professionals determine EITC eligibility.

Eligible Foster Child – (In TY 2005) Eligible foster child. An eligible foster child is an individual who is placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction.

Free File – Free File allows qualified taxpayers to prepare and e-file their own tax returns for free using commercially available tax preparation software. More than 60 percent of Americans are eligible for Free File.

ITIN – Individual Taxpayer Identification Number – A tax processing number issued by the Internal Revenue Service to individuals who are required to have a U.S. taxpayer identification number but who do not have, and are not eligible to obtain, a Social Security number (SSN) from the Social Security Administration (SSA).

LITC – Low Income Taxpayer Clinics – LITCs represent low-income taxpayers before the Internal Revenue Service in audit, appeals and collection issues, and offer federal tax litigation for free or for a nominal charge. LITCs and their volunteers are completely independent of and are not associated with the federal government.

Publication 596 – The IRS tax booklet that contains the EITC requirements, examples and worksheets to calculate the EITC. This booklet is available in both English and Spanish.

Qualifying Child – To be a qualifying child, a child must meet statutory relationship, age and residency requirements. A child is not a qualifying child unless the statutory requirements are met. Pub 501

Schedule EIC – A form taxpayers use to provide information on qualifying children (e.g., names, ages, Social Security numbers). It must be completed and attached to the taxpayer's tax return if the EITC is claimed with a qualifying child.

SSA – Social Security Administration - An independent government agency that manages the social insurance program, consisting of retirement, disability and survivors benefits. To qualify for these benefits, most American workers pay Social Security taxes on their earnings; future benefits are based on the employees'contributions.

Statutory Employee – If workers are independent contractors under the common law rules, such workers may nevertheless be treated as employees by statute (statutory employees) for certain employment tax purposes. For more information regarding statutory employees, see Publication 15-A, Employers Supplemental Tax Guide.

TANF – Temporary Assistance for Needy Families – A welfare benefit that provides assistance and work opportunities to needy families by granting states the federal funds to develop and implement their own welfare programs. It is generally not affected by claiming the EITC, however this depends on the state where the taxpayer resides.

TCE – Tax Counseling for the Elderly – A program run by trained volunteers, offering free tax preparation services to people 60 years or older.

TY – Tax Year – The year for which taxpayers file their federal income tax return.

VITA – Volunteer Income Tax Assistance – A program run by trained volunteers offering free tax preparation services to low-income taxpayers.

VRPP – Volunteer Return Preparation Programs – Programs that provide free tax return preparation assistance, e.g. Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE).

Online Pubs

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