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$1502 EARNED INCOME TAX CREDIT (FOR SENIORS!) | $3000-$3600 CHILD TAX CREDIT 2022 [Q&A]

Millions of older Americans will be able to claim an earned income tax credit when they file their 2021 tax returns this year. Take a listen to this statement by Marsh Ryerson, who recently spoke at a White House event designed to promote the changes to the EITC and Child Tax Credit included in the American Rescue Plan of 2021. “Older workers have been hard hit by the pandemic, and we’re delighted that people age 65 and older are now eligible to receive the EITC for the first time. But poverty doesn’t go away in one year — this is an important benefit that must continue.” Before the changes were included in the American Rescue Plan, individuals aged 65 and older were not eligible for the Earned Income Tax Credit. For the 2021 tax year, the legislation lifted that age cap and tripled the maximum credit for workers without children to $1,502. Workers age 65 and older are projected to total 13 million by 2024 and are the fastest growing age group in the workforce, according to reports by the AARP.


In addition to the federal tax credit, 22 states base their own earned income tax benefit on the federal one. Because of the increased EITC, workers in those states will be eligible for an average of $270 for the 2021 tax year. Marsh Ryerson also states that “We know that the Earned Income Tax Credit lifts 5 to 6 million people out of poverty, including 3 million children, but about 20 percent of eligible individuals still don’t claim the EITC, including an estimated 5 million in underserved communities. As a result, more than $7 billion goes unclaimed. That not only hurts these families, but also their communities and local businesses.” Each year, the AARP Foundation’s Tax-Aide program helps low-to-moderate-income taxpayers across the country file their returns for free. Tax-Aide volunteers have been trained and certified by the IRS, and as such, are prepared to guide taxpayers with filing, as well as keeping them aware of the changes to the EITC and Child Tax Credit. The AARP Foundation will also help support community-based organizations, especially in African American and Hispanic communities, to get the word out regarding the eligibility expansion of the EITC credit.


Millions of Americans who have never filed a tax return will need to do so this year to claim the enhanced child tax credit. Previously, only people who earned enough money to owe income taxes could qualify for the full credit. But as part of the $1.9 trillion coronavirus relief package, President Joe Biden expanded the program, increasing the payments to up to $3,600 annually for each child aged 5 or under and $3,000 for those who are ages 6 to 17. The monthly payments have amounted to $300 for each child 5 and younger and $250 for those between 5 and 17. The government began to send the payments out, on a monthly basis, starting last July, a total of $93 billion in payments. And therefore, there are an additional six months’ worth of payments waiting to be claimed. Some families haven’t collected any of the benefits they’re entitled to. All in all, an estimated $193 billion is yet to be claimed. And the only way to receive that money is to do what? To file a tax return of course. C’mon you guys are the best listeners ever right? I hope so. Alright now that we’ve covered the segment on the Earned Income Tax Credit for seniors, let’s get into this Q&A segment on the Child Tax Credit. The first question we have has to do with eligibility.


WHO GETS THE CHILD TAX CREDIT?

More than 36 million families received the advanced payments in December alone, which marked the last month that advanced monthly payments were sent to households. Families qualify for the full credit if their 2021 adjusted gross income was at or below $150,000 for married couples filing a joint return, or $75,000 for single-filer parents.


HOW DO I KNOW IF I QUALIFY AND WHAT IF I DON’T OWE TAXES?

Whether or not a family owes tax money or has filed taxes before, they will need to file a return to get all or the rest of their money. Eligible families that didn’t receive any advance child tax credit payments during 2021 can still claim the full amount of the child tax credit on their federal tax return. Those families that are unsure of whether they’ve received payments, or potentially received paper checks that went uncashed, can visit the Child Tax Credit Update Portal, to see how much of the credit they should have received. Additionally, families that received payments should have received a “Letter 6419, 2021 advance CTC” notice, which includes information on the amount of advance payments families have received and tax information for filing purposes. However, the IRS has said that some people may have received incorrect information on their forms. The portal can help people who want to confirm the correct amount they should have received. Despite any inconsistencies in documentation, the IRS advises that taxpayers should keep the letter, and any other IRS communications about advance payments, with their tax records.


WHAT IS THE BEST WAY TO FILE?

The IRS urges individuals to file their taxes electronically to process forms faster, and provides links on the agency website to free filing sites like GetYourRefund.org, which helps families earning less than about $66,000 a year file their taxes for free. The organization partners with IRS-certified Volunteer Income Tax Assistance, and provides free help in English and Spanish. Another option is MyFreeTaxes.com, which provides virtual assistance to people who make $58,000 or less to file their federal and state taxes for free. That service is offered through the United Way. The IRS also has a tool to help individuals identify other free file sites that offer tax filing help.


WHAT IF I LIVE OUTSIDE THE 50 STATES?

While the coronavirus relief package included child tax credit benefits for residents of Puerto Rico, they were not eligible to receive the advance monthly payments. Instead, Puerto Rican residents can receive the full amount of child tax credit that they are eligible for by just going ahead and filing a federal income tax return this year. Additionally, residents of American Samoa, the Commonwealth of the Northern Mariana Islands, Guam or the U.S. Virgin Islands may be eligible for the full child tax credit payments. However, they will need to contact their local U.S. territory tax agency.


WHO CAN HELP ME SORT THIS OUT?

The IRS has launched a website, called ChildTaxCredit.gov, which lists criteria that filers must meet in order to receive the full credit. Additionally, the federal agency will begin offering walk-in assistance with IRS volunteers in limited locations for individuals who need help filing their taxes, beginning February 12th. Thirty-five tax assistance centers around the country will be open from 9 a.m. to 4 p.m. on the second Saturday of the next four months.


The tax filing deadline is April 18th. So get on it.

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