Earned Income Tax Credit

As part of the American Rescue Plan, the new Child Tax Credit offers monthly cash payments to families with children, up to $300 per month, per child. If you are a parent or caregiver of children under 18, you may be eligible even if you do not usually file taxes or have low/no earnings.

The federal government is using the IRS to quickly distribute monthly cash payments to families with children for the next year to help alleviate the burdens created by the COVID-19 pandemic. The first round of payments was issued on July 15, either through direct deposit, paper check or debit cards.

You can’t get your payments if you don’t file your taxes. File now. It’s not too late. 

Visit www.GetYourTaxFacts.org or call 2-1-1 to schedule a FREE income tax appointment.

Did you earn income in 2019 or 2020? Don’t miss your chance to get back up to $6,660 with the Earned Income Tax Credit.

Virtual VITA

Virtual VITA is a safe and reliable way for Accounting Aid Society or Wayne Metro to prepare your federal, state and city tax returns without in-person contact and at no cost. Using a secure, IRS-approved software, VIRTUAL VITA lets you use your smartphone, tablet, or computer’s camera and email address to upload your tax documents and electronic signature – without leaving your home.

You can file your return virtually to claim your Earned Income Tax Credit, or Recovery Rebate Credit for those who were eligible but did not receive their stimulus check.

The IRS has extended the Tax Deadline to Monday, May 17, 2021

 

Earned Income Tax Credit

The Earned Income Tax Credit (EITC) provides a tax credit to working people with low to moderate income. To claim your refund, you must meet certain requirements and file a tax return, even if you do not owe any tax or are not required to file. If you worked full or part time this year, you may qualify for the credit.

This tax season, tax filers will be able to choose whether they want to use either their 2019 or 2020 earned income to calculate the Earned Income Tax Credit on their 2020 income tax returns, as a result of the recently passed COVID19 relief package. The look-back will also help people qualify for the refundable portion of the Child Tax Credit, which is allowed even if you do not owe any tax. This means that individuals who have been out of work in 2020 can still benefit from the EITC by choosing to calculate their EITC based on their 2019 income.

Families and individuals with incomes up to $57,000 are eligible for free full-service tax help. Call 2-1-1 to schedule your appointment today or use the online scheduling link below.

Schedule your appointment today by completing the questions below!

 

Who Qualifies?

You must have earned income (from working) in 2019 or 2020 to qualify. The income limit to qualify varies depending on your tax filing status and number of children in your household.

  If your income is less than this amount… …you could qualify for a credit up to this amount.
# of qualifying children single or head of household married filing jointly maximum credit amount
None $15,820 $21,710 $538
1 $41,756 $47,646 $3,584
2 $47,440 $53,330 $5,920
3 or more $50,594 $56,844 $6,660

 

 

Not everyone who qualifies will receive the maximum credit. The exact amount of your credit will depend on your income. You must file a tax return to collect your refund.

Qualifying children can include your biological children, adopted children, grandchildren, younger siblings, and nieces and nephews. To qualify, children must  live with you at least half of the year and be under age 19, be under 24 and a full time student, or be permanently disabled.

See the IRS website for full information about eligibility.

 

How COVID19 May Affect your Tax Return

  • Did you have a reduction in income?
    • You may qualify for EITC, if you haven’t before, but the amount of your refund may change
    • EITC Lookback - This tax season, tax filers will be able to choose whether they want to use either their 2019 or 2020 earned income to calculate the Earned Income Tax Credit on their 2020 income tax returns, as a result of the recently passed COVID19 relief package.
  • Did you receive unemployment benefits (including pandemic unemployment insurance)?
    • The first $10, 200 of 2020 Unemployment benefits is considered nontaxable income but does not count as earned income. If you did not withhold taxes on your unemployment payments, it could lower your tax refund or certain clients may owe taxes
    • Check the withholdings calculator here for additional information
  • Did you start a side hustle or take a job that would be considered self-employment?
    • If you worked for Lyft, Uber, or earn income working for similar services, work as an independent contractor, or have your own business you may be subject to self-employment taxes

Ensure that you “Know Before You Go” to a commercial tax preparer. There are best practices to ensure you avoid predatory practices that may reduce your return such as a high fee for service, cash advances or rapid refunds. Keep 100% of your refund through safe, trusted providers!

 

Recovery Rebate

Eligible individuals who did not receive a stimulus check or received less than they were eligible for – either the first or the second payment – may be able to claim it when they file their 2020 taxes in 2021 under the Recovery Rebate Credit. Any eligible individual who did not receive the full amount of the stimulus check, can claim the Recovery Rebate Credit on a 2020 Form 1040 or Form 1040-SR. Generally, this credit will increase the amount of your tax refund or lower the amount of the tax you owe. Virtual VITA tax preparers can help you claim this credit!

To check the status of your stimulus check visit: IRS.gov/getmypayment.

For more information about Stimulus Check and the 2020 Recovery Rebate, key information will be posted on IRS.gov/eip. For other COVID-19-related tax relief, visit IRS.gov/coronavirus.

 

You can file your taxes for free yourself using simple online software.

  • United Way’s MyFreeTaxes program is available for free to anyone at any income. Get started at UnitedWaySEM.org/Taxes. The guided question-and-answer format will help you file your federal, state, and local tax returns and can handle self-employed tax returns.
  • TurboTax Free File is available to anyone with an income of less than $39,000, or less than $72,000 for active military or anyone who qualifies for the Earned Income Tax Credit. The TurboTax Free File program includes your federal, state, and local tax returns and can handle self-employed tax returns.
  • If your income is less than $57,000, you qualify for free, in-person tax preparation services. Detroit also has conveniently located throughout the city free and accessible services to assist you with preparing your federal and state tax return. Schedule your appointment online or call 2-1-1 today for an appointment.
Do you have a side hustle or work as an independent contractor?
If you drive for Uber or Lyft, earn income working for similar services, work as an independent contractor, or have your own business, you may be subject to self-employment taxes. You can still get your taxes done for free if you meet the income guidelines.