Pink piggy bank with text "Tax Credits and Free Tax Preparation Services for Low-Income Families"

Tax Credits and Free Tax Preparation Services for Low-Income Families

The Federal Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) are among the largest Internal Revenue Service (IRS) public benefits for low-income households. You can ensure that families participating in the subsidized child care program are informed about these credits and know how to find free tax preparation services for which they might be eligible.

 

What Is the EITC?

  • EITC is a refundable tax credit that lifts more than 6 million people out of poverty each year, half of whom are children.
  • EITC helps low-to-moderate income working individuals and families keep more of the money that they earn.
  • People can claim the EITC if they are U.S. citizens or resident aliens with a social security number valid for employment and if they meet the income limits for their filing status.

 

Maximum Qualifying Income by Filing Status and Number of Qualifying Children Claimed (2016 Tax Year)

 

Filing Status Qualifying Children Claimed
Zero One Two Three or More
Single, Head of Household, or Surviving Spouse $14,880 $39,296 $44,648 $47,955
Married, Filing Jointly $20,430 $44,846 $50,198 $53,505

 

  • The maximum amount of credit that can be returned for tax year 2016 is:

o   $6,269 with three or more qualifying children

o   $5,572 with two qualifying children

o   $3,373 with one qualifying child

o   $506 with no qualifying children.

 

What Are the Child Tax Credit and Additional Child Tax Credit?

  • The CTC is a nonrefundable credit that can reduce a family’s tax by as much as $1,000 for each qualifying child. The CTC and Additional Child Tax Credit (ACTC) should not be confused with the Child and Dependent Care Tax Credit.
  • The ACTC is a credit that a family might be able to take if they are not able to claim the full CTC amount.

 

Encourage Families To Use Free Tax Return Preparation Services

  • The Volunteer Income Tax Assistance (VITA) program offers free tax help to people who generally make $54,000 or less, persons with disabilities, and limited-English-speaking taxpayers who need assistance in preparing their tax returns.
  • The Tax Counseling for the Elderly (TCE) program offers free tax help for all taxpayers regardless of age or income, but TCE counselors specialize in pensions and retirement-related issues unique to seniors ages 60 or older.
  • VITA and TCE sites are generally located at community and neighborhood centers, libraries, schools, shopping malls, and other convenient locations across the country. To locate the nearest VITA or TCE site, use the VITA and TCE Locator Tool or call(800) 906-9887.

 

Where Can I Find More Information?

For more information, visit these three IRS Web sites:

 

Questions

To learn more, please e-mail us at pfce@ecetta.info or call us (toll-free) at (855) 208-0909.

 

 

Office of Child Care

Administration for Children and Families

U.S. Department of Health and Human Services

Mary E. Switzer Building, Fourth Floor, MS 4425

330 C Street, S.W.

Washington, DC  20201

General office number: (202) 690-6782

Fax: (202) 690-5600

General e-mail: occ@acf.hhs.gov

Web site: http://www.acf.hhs.gov/programs/occ

 

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