Tax Empowerment: 5 Essential Ways Advocates Can Support Filers this Tax Season
Abby Ling and Nandini Singh
With Tax Day upon us, millions of Americans nationwide are busy gathering their documents and double-checking their numbers as they begin filing their taxes. But without proper support, guidance, and resources while filing, many low-income workers and families could be leaving thousands of dollars unclaimed and not even know it.
For the tax year 2021, 31 million filers claimed $64 billion in the federal Earned Income Tax Credit (EITC). But, in the tax year 2022, that number dropped to approximately 23 million workers and families valued at $57 billion in the federal EITC.
The difference? 2021 was the same year the American Rescue Plan (ARP) expanded the federal Child Tax Credit (CTC) and EITC, effectively increasing the CTC’s value from $2,000 to $3,600 for children under age six and to $3,000 for other children under age 18, and improving the federal EITC’s benefits for young professionals and workers without children.
Since the expiration of ARP at the end of 2021, the federal CTC and EITC returned to their original rates, leaving millions of workers and families with children unable to claim the full benefit. However, the proven success of the expanded federal tax credits encouraged policymakers and advocates to promote tax credits at the state level. As of 2023, roughly two-thirds of states, including the District of Columbia, have a state EITC, and 14 states, including D.C., have a state CTC. This number continues to grow with each piece of legislation.
Anti-poverty programs are most effective when individuals can secure the financial support needed for upward mobility. However, their complex terms, when combined with even more complex processes, can result in qualifying filers not claiming tax credits, not filing their taxes, or filing them incorrectly. Some of the most common errors for incorrectly filing for the federal EITC are:
- Claiming a child who does not qualify for the EITC
- More than one person has claimed the same child
- Social security and last name do not match
- Incorrect filing status
- Income or expense reporting errors
These mistakes are easily avoidable when filers are provided with the proper tools and insights to understand the requirements for certain tax credits when filing their taxes. Ahead of Tax Day, here are five ways to ensure your state’s filers are well-prepared and best supported to claim their credits:
- Remind Eligible Filers Not to Wait to File for Tax Credits. While the proposal to re-expand the federal CTC still awaits a decision in the Senate, the IRS advises eligible families with children not to wait to file their taxes and claim eligible tax credits. If enacted, the IRS shared that the agency will handle all retroactive adjustments and issue refunds tied to the expanded CTC. That said, please advise filers to check their eligibility and claim available tax credits as soon as possible!
- Promote Local Resources. Several states and cities are leading free tax preparation campaigns that pair low- and middle-income workers and families with tax assistance tools, guides, and filing support at no charge. These campaigns are designed to help filers eligible for federal and state tax credits file taxes and claim valuable funds. New York and Colorado are two states that recently announced state-wide initiatives to bring awareness to tax filing resources and ensure eligible taxpayers can claim the tax credits available to them.
- Keep Advocating for Tax Credits on the State Level. Last year, at least 13 states expanded or enacted a state EITC, and 12 states expanded or enacted a state CTC. This year, several more are in the process of keeping the momentum going. Wisconsin Governor Tony Evers (D) is one of the first among the few to expand a local tax credit this calendar year. States like Illinois hope to follow suit while legislative sessions are still in effect. As the future of federal tax credits remains uncertain, we must continue working closely with state lawmakers to implement progressive policies that will provide financial support to all workers and their families, which starts with pursuing effective anti-poverty strategies like the CTC and EITC.
- Collaborate with Partners. Partner with other advocacy organizations, tax professionals, government agencies, and community partners to coordinate efforts and maximize support for taxpayers. These partnerships can also involve working with local media outlets, including newspapers, radio stations, and online platforms to raise awareness about tax credits through public service announcements, interviews, and feature stories. A key role of partnerships is to expand reach to a broader audience and amplify the message about the benefits of claiming these essential funds.
- Empower Taxpayers to Learn More. An abundance of information and research on the benefits of tax credits at the national and state levels often go overlooked. People unaware of tax credits and their benefits are less likely to engage with the tools tied to them. Resolving the disconnect by providing information about eligibility criteria, application processes, and the known benefits of federal and state tax credits can boost the number of people who claim them. By educating our communities in these foundational ways, they possess the tools to advocate for themselves and their families in accessing money that can help them meet their basic needs.
These reminders are starting points for effectively supporting eligible taxpayers by mitigating confusion around tax credits.
This Tax Day, it’s imperative that every eligible worker knows they have the opportunity to claim money that can afford them childcare, rent, groceries, education, or professional growth. We call upon advocates and local organizations to ensure your communities know about the tools and benefits available to them. We urge policymakers to remember the value of tax credits and the importance of continuing to pursue their investments for today’s workers and tomorrow’s children.