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Tax Credits & Tax Refunds

What Are They Thinking? Six States Argue Against Financial Assistance in King v. Burwell—Threatening Nearly 1 Million Women

On March 4th, the U.S. Supreme Court will hear arguments in King v. Burwell, a case challenging a core provision of the Affordable Care Act (ACA). The Court will decide whether individuals and families will continue to receive tax credits to help purchase insurance on the federally-facilitated health insurance marketplaces. There are currently 37 states that utilize this kind of marketplace.

The loss of tax credits would have dire consequences in these states — we estimate that nearly 7 million women would lose access to affordable coverage. Last year, 86 percent of people who sought coverage in the federally-facilitated marketplaces used tax credits to lower their premiums [PDF], and this year’s enrollees similarly rely on this help. If such a high proportion of Marketplace enrollees lose coverage following the Court’s decision, premiums for remaining enrollees would skyrocket, further destabilizing the market. Read more »

Happy 40th Birthday EITC! 10 Things We Love about the Earned Income Tax Credit

This year, the Earned Income Tax Credit (EITC) turns 40. Happy Birthday EITC! To celebrate, here are 10 important things to remember about this vital support for working families. Read more »

Two Simple Tax Code Changes that Would Make a Big Difference for Working Families

I have an almost 2 year old daughter, Lilly. She is so many things: funny, loving, adventurous, curious…expensive. I mean she’s worth it and all, but man does that girl eat her way (literally and figuratively) through our family budget every month.  I know our family is not alone. It seems like everyone is talking about the rising cost of raising children—and it turns out that talk is actually true. And despite the rising cost of living and child rearing, most family income is not keeping up, delivering a one-two punch to working families’ bottom lines.

On June 23rd, the White House will hold a Working Families Summit to focus on the current needs of America’s working families, and potential policy solutions that can help address those needs. I’m hopeful that the Summit will be the beginning of a concerted push for changes that will respond to the economic realities of working families—including some changes in our tax code. There are many tax provisions that can help families make ends meet while raising kids—and a couple of commonsense proposals to make those tax provisions even more meaningful. Read more »

Unaffordable Health Care By Any Other Name

Women make up a large majority of the low wage workforce — many without access to affordable health insurance . The Affordable Care Act was supposed to change that. However, for millions of women and their families, something called the “family glitch” puts help with insurance premiums out of reach. But it really isn’t a glitch  because the IRS could have interpreted the law differently.

If you have access to health insurance coverage outside the health insurance marketplace (if you have coverage through your employer or a public insurance program such as Medicaid), then you are not eligible for the health insurance tax credits. But there is a special rule for employment based coverage – if your employer offers coverage that is unaffordable or doesn’t provide enough coverage, then you can say no to your employer coverage and enroll in the marketplace with a health insurance tax credit (if you’re otherwise eligible for the tax credit). Read more »

Way to Go Colorado! Much Needed Child Care Assistance Signed into Law in the Centennial State

Newsflash: Child care is expensive

In a majority of states, the cost of child care for an infant exceeds the cost of public college tuition.  That cost pinches the wallets of all families with young children in paid child care.  For low-income families, it’s much more than a pinch—on average, families in poverty who pay for care spend nearly one-third of their income on that care.

Child care costs in Colorado are particularly high relative to median income—on this measure, Colorado ranks among the least affordable.  But parents will have help with these costs thanks to new state legislation signed into law last month.  These new laws will offer much-needed assistance to low-income families with young children.    Read more »

Think You Can't Afford Health Insurance? Think Again!

Most people shopping for health insurance through the Obamacare Marketplace will be eligible for financial assistance—called the Premium Tax Credit—to help them cover the cost of insurance. We’re talking real help—the average amount of financial assistance per family is estimated to be $5,290. Time is running out to sign up this year—the deadline to get started is next Monday, March 31! Read on to get answers to some commonly asked questions about the Premium Tax Credit—and then dash on over to healthcare.gov or call (800) 318-2596 and get started on your application today!

Am I eligible? 

There are three basic eligibility requirements for the Premium Tax Credit:

  1. Your income must be between 100%-400% of the federal poverty line (for a family of four, that’s an income between $23,550 and $94,200).
  2. You must buy health insurance through the Marketplace (sometimes called Exchange)—either by visiting www.healthcare.gov or calling (800) 318-2596. 
  3. To receive the Premium Tax Credit, you can’t be eligible for other health insurance coverage—either through another government program like Medicaid or Medicare, or through your employer.

Tax Day Cometh - And That Can Mean Help for Millions of Families

As the April 15 tax filing deadline approaches, NWLC and its partners want you to know about federal and state tax credits for which working families may be eligible -- and how to get help filing tax returns.

Many families are still struggling to recover from the recession, and keeping up with their bills can be a challenge. So it’s important now, especially for families with children, to claim federal and state tax credits that can to help them make ends meet.  To do that, families must file tax returns.

Families may be eligible for:    Read more »

Obamacare and Taxes: Two Important Tips for Avoiding a Headache (and a Wallet Ache!) Next Year

Did you recently sign up for health insurance through your state’s health care marketplace?  If so, hurray! I’m sure I don’t have to tell you why having affordable health insurance is a great thing. (If you or a loved one doesn’t currently have health insurance, and you haven’t signed up through the Marketplace yet, it’s time to start shopping—the open enrollment period ends in a little over a month, on March 31.)

But wait, you ask—what do taxes have to do with signing up for health insurance? Quite a bit, it turns out. The IRS just released some health care tax tips—from those, here are a couple of really important highlights to keep in mind between now and next tax season. And yes, I did say next tax season—what you know now will definitely help you later. Read more »

Happy Tax Day!

This post is the ninth in a series of weekly posts containing tax information and filing tips. Check back next week for our next post, or click here to read past posts. 

So today is the deadline for filing your federal tax return (and most state returns). Although many people associate filing their taxes with feelings of confusion, stress, and general misery, tax time can also help give low- and moderate-income families a financial boost through federal tax credits like:

  • Earned Income Tax Credit, designed to supplement the wages of low- and moderate-income families (those who earned less than $50,270 in 2012). This credit is worth up to $5,891 and is available as a refund for families who owe little or no income tax.
  • Child Tax Credit, designed to help 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 2012.  
  • Child and Dependent Care Tax Credit, designed to offset some of the child and dependent care costs that families incur in order to work. This credit is worth up to $2,100, though the amount that can be claimed is limited by the amount a family pays in federal income taxes.

And many states offer their own versions of these credits. Read more »

Calling All Tax Credit Stories!

This post is the sixth in a series of weekly posts containing tax information and filing tips. Check back next week for our next post, or click here to read past posts. 

Taxes. Just saying the word can make people groan. But the reality is, this time of year can actually bring good news to low- and moderate-income families all over the country. Federal tax credits such as the Child and Dependent Care Tax Credit (worth up to $2,100), the Child Tax Credit (worth up to $1,000 per child), and the Earned Income Tax Credit (worth up to $5,891), can give a boost to families whose incomes are too low to owe taxes. 

One family in Dallas took advantage of free tax preparation at a United Way VITA site and was rewarded for their effort. They qualified for the federal EITC and received nearly a $6,000 refund! Less than two weeks later, the refund was in the family's bank account and helped to pay for things that the family really needed: children's clothes, a crib, and a new car.  Read more »