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filter_saturation_hover=”100″ filter_brightness_hover=”100″ filter_contrast_hover=”100″ filter_invert_hover=”0″ filter_sepia_hover=”0″ filter_opacity_hover=”100″ filter_blur_hover=”0″]https://cwfphilly.org/wp-content/uploads/2021/10/credits.jpg[/fusion_imageframe][fusion_text columns=”” column_min_width=”” column_spacing=”” rule_style=”default” rule_size=”” rule_color=”” content_alignment_medium=”” content_alignment_small=”” content_alignment=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky” class=”” id=”” margin_top=”” margin_right=”” margin_bottom=”” margin_left=”” font_size=”” fusion_font_family_text_font=”” fusion_font_variant_text_font=”” line_height=”” letter_spacing=”” text_color=”” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=””]
You might be shocked to learn that an estimated $1 billion in tax credits is unclaimed each year! That means money that could be yours stays in the IRS account.
Why?! Because people don’t claim it.
Campaign for Working Families (CWF) wants to make sure that your money ends up in your pocket and not with the IRS!
It’s no secret that understanding the ins and outs of taxes is challenging for anyone who’s not a tax or financial professional. The American Rescue Plan offered much-needed relief to working individuals and families for the tax year 2021 (the taxes you file in 2022), but it does make the tax code a bit more complicated. Plus, for now, those rules only apply to 2021 and then revert to the old rules in 2022 (pending permanent changes in future tax legislation).
This year, because of the changes, it’s more important than ever for families to enlist the help of a professional tax preparer. Working families and individuals in Southeastern Pennsylvania and Southern New Jersey who need it most can get free professional help from an IRS-certified CWF tax preparer. That way, you don’t have to worry about leaving money on the table because CWF will make sure you get any credits due.
The Child Tax Credit
One of the biggest tax credit changes includes changes to the Child Tax Credit (CTC), which provides a financial benefit to Americans with children. The American Rescue Plan made three changes:
Credit Increases
The per-child credit increased from $2,000 per child in 2020 to $3,600 for each child under age 6 and $3,000 for each child 6 -17, the IRS raised the credit from $2,000 per child in previous years.
Monthly Installments
Families could choose to get the credit in monthly Child Tax Credit payments beginning in the summer of 2021. If you choose monthly installments, the IRS pays out half of the tax credit (based on your last tax filing) in monthly payments between July and December 2021. You then claim the rest when you file taxes next year. If you decide to opt-out of advanced monthly payments, you will receive the entire credit next year when you file your taxes.
Child and Dependent Care Tax Credit
The Child and Dependent Care Tax Credit (CDCTC) is a federal tax credit that helps cover out-of-pocket child care expenses that allow parents with children under 13 to work, look for work, or in some cases, even go to school. When they file their taxes, families who claim the CDCTC will receive a percentage of what they spent on child care this year back as a tax refund. Many families use their refunds to cover necessities, reduce debt, or save for emergencies.
According to a Bipartisan Policy Center survey, while many families have received payments for the child tax credit, nearly 50% aren’t aware they can claim another tax break for child and dependent care expenses.
The American Rescue Plan boosted the CDCTC in several important ways. This year, families can claim up to $8,000 in expenses for one child and up to $16,000 in expenses for two or more children. Families can also receive a higher percentage of these expenses back as a refund—up to 50% for families making $125,000 a year or less. So, a family with two children under 13 that earns $75,000 and spends $5,000 on child care would be eligible for a $2,500 credit this year.
Earned Income Tax Credit
The Earned Income Tax Credit (EITC ) is a refundable tax credit for low to moderate-income workers. It offers significant tax breaks by cutting the amount owed. However, the $1.9 trillion American Rescue Plan Act changed some of the rules around EITC. Experts estimate that EITC currently lifts more families out of poverty than food stamps, housing subsidies, and unemployment insurance combined.
- For the 2021 tax year, the earned income credit ranges from $1,502 to $6,728—3 times more than before—depending on your filing status and how many children you have.
- You don’t have to have a child to claim the earned income credit.
- EITC doesn’t just cut the amount of tax you owe—it could also score you a refund and, in some cases, a refund that’s more than what you paid in taxes!
CWF can help you determine which tax credits you’re eligible to receive and make sure you get them—at no charge!
Trying to figure out which tax credits you qualify for can be tricky, especially when there are so many changes to the tax code. Working families and individuals in Southeastern Pennsylvania and Southern New Jersey earning less than $60,000 per year can get free professional help at CWF. An IRS-certified CWF tax preparer will help you eliminate the stress that comes with taxes and make sure you get the tax credits you deserve!
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