Booklets help parents with taxes
Students with children have a new way to find and receive the tax breaks available to them.
The National Women’s Law Center (NWLC) and the American Business Collaboration (ABC) have joined forces and put out a booklet aimed at helping working parents receive tax breaks.
The booklet, “Credit Where Credit Is Due,” is designed to inform parents of four different federal provisions working parents may be able to file for, how much they can expect to receive and how to claim it, Christina Smith Fitzpatrick, NWLC political analyst, said.
“The booklet provides a thumbnail sketch of each of the provisions and then goes through some questions about eligibility and how to file,” Fitzpatrick said.
The four federal tax breaks outlined in the booklet are the Dependent Care Tax Credit, the Child Tax Credit, the Earned Income Tax Credit and the Dependent Care Assistant Program. These tax breaks may help pay for child-care expenses, reduce the amount of taxes owed and increase tax refunds, according to the booklet.
The Dependent Care Tax Credit is available to parents who have paid for employment-related child care. The amount of credit for this tax break can be as much as $720 for one child and $1,440 for two or more qualifying dependents.
A qualifying child is a child under the age of 13 at the time care was provided, according to the booklet.
The Child Care Tax Credit is available for a credit up to $600 in most families whose children qualify and the families adjusted gross income is under a certain level.
Low income is the main provision in the Earned Income Tax Credit. This credit is available to most all low-income families with children, Fitzpatrick said.
The Dependent Care Assistant Program is available through some employers, Fitzpatrick said, and allows employees to designate a certain amount of the paycheck to be withheld in a tax-free account to pay for child care. Other forms of the program may include cash reimbursements or vouchers, according to the booklet.
The Dependent Care Tax Credit and the Dependent Care Assistant Program are also available for any dependent who needs special care in the home such as in the case of a spouse being disabled, Fitzpatrick said.
“This is something we were interested in doing because one of the big issues here is that there are these good provisions available but they don’t do any good if people don’t do anything about them,” Fitzpatrick said.
Fitzpatrick said there are a good number of people unaware of the tax breaks available, and even people know what’s available many people don’t want to take the time to fill out the extra forms necessary to claim the tax breaks.
“The main point we’re trying to drive home here is that the savings you can get through filing for these tax breaks are worth it,” Fitzpatrick said.
NWLC and ABC want to help parents better manage family and employment and plan to continue having the booklets available, Fitzpatrick said.
The booklets have been distributed across the country to many child-care advocates in the hopes of reaching as many parents as possible, Fitzpatrick said.
The booklets are available at the NWLC’s Web site www.nwlc.org. Hard copies are also available to order through the Web site. The booklet and Web site also list parallel state provisions that working parents can file for.