(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.

What is the EITC?

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.

Why is it important?

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.

Who Qualifies?

You may qualify for the EITC:

• If you worked full-time or part-time in 2014;
• If you have qualifying children under the age of 19 who lived with you for more than half of 2014 (full-time students can be under 24 in 2014; children who are permanently and totally disabled can be any age);
• If you did not have qualifying children living with you, but you were between ages 25 and 64 in 2014;
• If all people on the return have a valid Social Security Number (not just you and your children);
• If your filing status is Single, Married Filing Jointly, or Head of Household;
• Even if you don't owe income tax

How can you Help?

GIVE - Donations to the Community Impact Fund support partners like Make Change NoCo and Realities Focus who provide free tax services to qualifying individuals and families.

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.