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February 26, 2015
(Special thanks to our friends at Make Change NoCo for sharing their expertise on this important topic!)
It's tax time again. I don't know about you, but for me, I can easily be confused by all the different tax credits and deductions that are available.
Because of the complex nature of taxes, thousands of working families in Colorado often overlook important federal tax credits when filing their tax returns because they simply don't know they exist. These families may be missing out on $6,000 or more in federal income tax refunds through the Earned Income Tax Credit (EITC) and other tax benefits.
The EITC is a refundable tax credit available to lower-income workers and their families. Workers earning less than about $52,500 from wages, self-employment, or farming could qualify. Many people will qualify for the first time this year due to changes in their income, marital status, or parental status, according to the IRS.
The IRS estimates only four out of five eligible working adults currently claim this credit. The Piton Foundation estimates that 50,000 Coloradans miss out on as much as $85 million combined in EITC refunds each year.
Tax credits, like the EITC, help working families in Colorado and also help stimulate our economy. Tax credits are primarily used to pay for necessities such as utilities, food, housing, transportation, education, and health care. “This money can make a real difference to working families particularly when they're struggling to balance their personal finances,” said Harry Love, Loveland Area Coordinator for the VITA / TCE free tax preparation program.
According to Piton, programs like the EITC are associated with a boost in children's school readiness and achievement, health outcomes, and future economic success. The local economy is also stimulated as economists estimate that tax credit dollars are re-spent three to five times in the local business community.
You may qualify for the EITC:
IF YOU HAVE:
YOU EARNED INCOME LESS THAN:
YOU MAY BE ABLE TO CLAIM UP TO:
|3 qualifying children||$46,227 ($51,567 married filing jointly)||$6,044|
|2 qualifying children||$43,038 ($48,378 married filing jointly)||$5,372|
|1 qualifying child||$37,870 ($42,210 married filing jointly)||$3,250|
|No children||$14,340 ($19,680 married filing jointly)||$487|
ADVOCATE - Be sure to pass this information on to anyone who may qualify. People can call 2-1-1 (or 970-407-7066) to learn more about tax credit eligibility and find the location of a free tax preparation site near them.
VOLUNTEER - Call 2-1-1 to find out about local volunteer opportunities.
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