Tax Credits for Families Could be Worth Thousands of Dollars

Tax Credits Outreach Campaign Targets Eligible Families to Ensure They Don’t Miss Out

(Washington, D.C.)  The National Women’s Law Center (NWLC) is teaming up with organizations around the country to launch a tax credits outreach campaign today to  make sure that more low- and moderate-income families claim available federal and state income tax credits.

Federal and state tax credits can help offset the cost of child care and other expenses for families. “For families who are often forced to choose between paying rent or going to the doctor, these tax credits can help relieve financial pressures and make a significant difference in their lives,” said Nancy Duff Campbell, Co-President of the National Women’s Law Center. “Families who claim these credits may receive refunds that will allow them to pay the rent, cover medical or dental expenses, have their car repaired, or put some money away for a future emergency.”

For 2011, families may be eligible for a number of federal tax credits, including:

• Earned Income Tax Credit, which helps supplement the wages of low- and moderate-income families (those earning less than $49,078 annually). This credit is worth up to $5,751 and is refundable.
• Child Tax Credit, which helps families offset some of the costs of raising children. This credit is worth up to $1,000 per child. Families who owe little or no income tax can receive some or all of this credit as a refund if they earned at least $3,000 in 2011. 
• Child and Dependent Care Tax Credit, which helps families offset some of the child and dependent care expenses they incur in order to work. This credit is worth up to $2,100, though the amount that may be claimed is limited by a family’s federal income tax liability.

Some states also offer their own family tax provisions: Twenty-eight states, including the District of Columbia, offer child and dependent care tax provisions, 24 states offer earned income tax credits and three states offer child tax credits.

“Families must file a tax return and claim these credits or they will miss out on benefits for which they are eligible,” Campbell said. “The goal of the tax credits outreach campaign is to spread the word about these credits and explain to families how they might also be eligible for free tax preparation assistance in their communities.”

The launch of the campaign coincides with Earned Income Tax Credit Awareness Day, an effort of the Internal Revenue Service to inform the public about the Earned Income Tax Credit and the requirements to claim the credit. As part of the NWLC campaign, state child care organizations, social service providers, and advocates will educate families about all three federal tax credits and parallel state tax provisions, as well as the availability of free tax preparation assistance.

NWLC has developed an online resource for parents and advocates with user-friendly fliers about both the federal credits and the parallel tax provisions of individual states. Materials are available in Spanish and other languages. To learn more about these federal and state tax provisions, visit www.nwlc.org/LowerYourTaxes.

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