As part of Home Start’s Communities In Action program, we help hundreds of San Diegans make the most of their tax returns every year. Here are a few of the key tips for families to look out for when preparing their taxes this season.
Dependent Taxpayer IDs
As you’re filing your taxes this year, be sure to plug in Taxpayer Identification Numbers (usually Social Security Numbers) for your children and other dependents on your return. Otherwise, the IRS will deny any dependent credits that you might be due, such as the Child Tax Credit. This is a small, but important detail that is often overlooked.
And, be especially careful if you are divorced. Only one of you can claim your children as dependents, and the IRS has been checking closely lately to make sure spouses aren’t both using their children as a deduction. If you forget to include a Social Security number for a child, or if you and your ex-spouse both claim the same child, it’s highly likely that the processing of your return (and any refund you’re expecting) will come to a screeching halt as a result, while the IRS contacts you to straighten things out.
After you have a baby, be sure to file for your child’s Social Security card right away so you have the number ready at tax time. Many hospitals will do this automatically for you. If you don’t have the number you need by the tax filing deadline, the IRS says you should file for an extension rather than sending in a return without a required Social Security number.
Earned Income Tax Credit Eligibility
Don’t overlook the Earned Income Tax Credit (EITC), a refundable federal income tax credit for low- and moderate-income working individuals, couples, and families.
Nationwide during 2018, 25 million eligible workers and families received about $63 billion because of the EITC. The average amount received nationwide was around $2,488. But the IRS estimates that about 21 percent of taxpayers who are eligible for the EITC fail to claim it, or are simply unaware that they qualify. Don’t let that happen to you.
You may qualify for CalEITC if:
- You’re at least 18 years old or have a qualifying child
- You have earned income within certain limits
The amount of CalEITC you may get depends on your income and family size.
- Have taxable earned income
- Have a valid social security number for you, your spouse, and any qualifying children
- Not use “married/RDP filing separate” if married
- Live in California for more than half the year
Earned income can be from:
- W-2 wages
- Salaries and tips
- Other employee wages subject to California withholding
However, you can’t get the Earned Income Tax Credit unless you file a federal tax return and claim it. Visit irs.gov to determine your eligibility and get additional information.
If this is the first year that you are claiming the credit, use the online IRS EITC Assistant to see if you qualify for tax years 2018, 2017, and 2016. You can file any time during the year to claim an EITC refund for up to three previous tax years. The IRS will not issue refunds for returns that claim the EITC or Additional Child Tax Credit before February 27, 2019. Early filers can make the most of this delay by planning how they will save their refund.
Young Child Tax Credit
In addition, the Young Child Tax Credit was introduced in 2019. If you qualify for CalEITC and have a child under the age of 6 as of the end of the tax year, you may qualify for up to $1,000 through this credit. Be sure to look out for this.
Seek Out Tax Assistance
Does this all seem overwhelming? We can help. Beginning January 27th, Home Start’s Communities In Action program will be offering free tax preparation for families earning $54,000 or less. And if you’ve missed filing past years, we can help with back taxes as well. Ultimately, we want to ensure San Diego families receive all of the benefits they qualify for.
For free tax prep assistance in-person or online, visit www.myfreetaxes.org or call us at (619)283-3624.
For additional links and information visit https://home-start.org/free-tax-prep/.