Tax Credits and Preparation Programs Ease Tax-time Hardships

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“I encourage the financial experts and the political leaders of your countries to consider the words of Saint John Chrysostom: ‘Not to share one’s goods with the poor is to rob them and to deprive them of life. It is not our goods that we possess, but theirs.’ ”                                            -Pope Francis   (5/16/13)

Taxes. They come each year with precise predictability, yet are met by many with angst and foreboding. The fear of having to pay an unexpectedly large tax bill or for tax preparation services can be budget crushing, especially for low-income wage earners and others who constantly face financial hardships.

However, there are some programs in place in California that are often overlooked that are designed to benefit working people with low to moderate income.

The state of California has enacted the California Earned Income Tax Credit (CalEITC), which provides a rebate to low-income workers based on a percentage of their income. Unlike most tax credits, the CalEITC is refundable, and some may be eligible for refund of up to $4,824, depending on income and the number of children under their care.

CalEITC is a compliment to the Federal version – established during the Reagan presidency – which has been described by both sides of the aisle as the most effective poverty-fighting program in the U.S.

Adrianna Trujillo participated in the EITC program last year.

Trujillo, who is a victim of domestic violence and owns a small business providing resources to other victims and their families, is currently involved in a related court battle, and says her refund “went straight to pay attorney fees I couldn’t otherwise afford.”

“It would have been nice to save for something, but that’s what needed to be done right now and it was a huge blessing.”

It is estimated that approximately 600,000 families will benefit from CalETIC this year. In the federal government, approximately four million families will apply for the in credit this year. While both programs are identical in nature, the wage requirements are different, so exclusion from one program does not dictate exclusion from the other.

Catholic Charities of California are also heavily involved in tax help for California’s low-income population, and several parishes throughout the state also have free tax preparation services and EITC eligibility assistance. Catholic Charities of Santa Clara alone has helped over 15,000 families in filing taxes over the last 11 years.

That assistance is provided via the Volunteer Income Tax Assistance (VITA) program, which offers free tax help to people who generally make $54,000 or less, persons with disabilities and limited English speaking taxpayers who need assistance in preparing their own tax returns. IRS-certified volunteers provide free basic income tax return preparation with electronic filing to qualified individuals.

“We’ve been involved in the VITA program for a number of years because we saw there was a enormous need for tax services,” said Leif Ozier, Regional Coordinator for Family and Community Services for Catholic Charities San Bernardino.

“We would meet with clients to help them with their budgets and 99% of the time they were having to pay for tax services and couldn’t afford it. I can’t even explain how valuable these programs are to the community,” he said.

Trujillo is also a VITA volunteer, and often spends her weekends helping those for whom filing taxes is daunting.

“I’ve gone in to help and stayed hours later than I was scheduled because we had so many people come in,” she said.

Tax preparation in itself can be a convoluted and complicated process, with multiple forms to file and calculations to determine. Tax credits like CalEITC can often be overlooked, so it is important to assess your eligibility, either on your own or by asking your tax preparer. To find out if you qualify for the CalEITC, visit www.CalEITC4me.org.

To ensure its continued existence, all eligible persons should participate. Most important is putting money back in the pockets of those families that need it most, so those who are eligible should be sure to claim the credits they’ve earned.

Trujillo knows just how much others have been helped by claiming the CalEITC.

“I know a single mom who used her CalEITC refund to purchase an inexpensive car she badly needed,” she said. “A neighbor of mine who I actually helped in the VITA program used his refund to finally do some maintenance on his home, which had rats running around.”

The Catholic Church, and the California Catholic Conference (CCC) in particular, advocates for programs that directly help those facing financial hardships. The CCC worked tirelessly to support the efforts to enact the CalEITC, and continues to be a pillar of support for its renewal.

For more information on VITA and other economical tax preparation services, visit www.irs.gov.

 

Article source: http://www.cacatholic.org/tax-credits-and-preparation-programs-ease-tax-time-hardships

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