Food Bank For New York City’s Tax Assistance Program provides low-income New Yorkers with free tax preparation services, helping them get the refunds and credits to which they are entitled. If you are a low-income filer, you might be entitled to various tax credits and deductions for which other taxpayers don't qualify. With the tax deadline now set for May 17, Food Bank offers some tips for New Yorkers who have yet to file their taxes this year.
Filing Your Taxes Can Unlock a TON of Benefits
Food Bank’s free tax services can improve low-income families’ finances. Filers can avoid retail tax preparation fees, and save an additional $450. Plus, filing with Food Bank can connect eligible tax clients to SNAP, financial coaching, banking services, and other benefits. You can use Food Bank’s Virtual Tax Service to file your taxes safely and easily from home using your smart phone, tablet or computer.
Don’t Underestimate the Earned Income Tax Credit
The Earned Income Tax Credit (EITC) is one of the most effective anti-poverty tools for working-age households. Not only can it provide low-income workers and families with a much-needed tax break, but it can also bring them additional income. In 2018, the EITC and child tax credit lifted 8.9 million people out of poverty. If you file your taxes with Food Bank, your family could get an EITC worth up to $8,991.
You May Qualify for Special Deductions
You might also be entitled to various credits and deductions for which other taxpayers do not qualify, including child tax credits, tax credits for the elderly or disabled, and credits and deductions for making IRA and retirement plan contributions. Be sure to ask your tax preparer if you qualify.
Your Tax Refund Will Likely Be More Than Your Stimulus
If you received any stimulus checks in 2020, the IRS has stated that it is not taxable, which means it will not reduce your refund or increase the amount you owe when you file your 2020 federal income tax return. If you did NOT receive your stimulus checks in 2020, the best way to receive them is by filing your taxes. The average tax refund in 2020 was $1,900, compared to the COVID Response Stimulus Check (Economic Impact Payment (EIP) of $1,200, which means more money in your pockets for bills, food, and other needs.
The American Rescue Plan Has Unlocked New Tax Breaks
If you collected unemployment insurance benefits last year, you may qualify for a new tax break from the American Rescue Plan Act. Under the newly signed COVID relief bill, the IRS will waive the federal tax on up to $10,200 of unemployment benefits that an individual received in 2020.
Additionally, the American Rescue Plan Act expanded the Child Tax Credit and Child & Dependent Care Tax Credit by making them both "fully refundable," which means even families earning too little to owe taxes can still receive the full credit ($3,600 for children under age 6 and $3,000 for children ages 6-17).
Who qualifies: Single heads of household up to an adjusted gross income of $112,500 or joint
filers up to an adjusted gross income of $150,000 qualify for the full benefit.
For nearly 20 years, Food Bank has prepared more than 775,000 tax returns, and secured $1.3 billion in tax refunds for low-income New Yorkers. Food Bank’s Volunteer Income Tax Assistance (VITA) program is one of the nation’s leading Tax Time Allies, a financial empowerment campaign founded by Intuit Financial Freedom Foundation (IFFF) which works with nonprofits across the country to empower taxpayers to take control of their finances and save more of their hard-earned money.
To learn more, visit foodbanknyc.org/taxhelp!
Post Topic(s): FINANCIAL EMPOWERMENT