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What Your Caregiver Families
(And YOU!)
Need To Know To Claim All
The Money You’ve Earned At Tax Time!
March 12, 2008
Hello Everyone! Thanks so much for joining us today for our chat on tax credits that
may be available to the caregivers you serve! Our very special guest is Roxy Caines
from the Center on Budget and Policy Priorities! We posted, on our private page, a
Melinda summary of the Earned Income Credit and Child Tax Credit, for your information.
Thanks so much, Roxy, for joining us today to answer questions our RAPPs have about
these tax credits and to share any other information you think might be helpful.
Welcome!
Roxy Hello everyone! I am pleased to join you today!
Dawn joined.
Melinda If you have specific questions for Roxy, please feel free to ask them!
As you know, we are in the middle of tax season. Many people have already filed their
tax returns, but some have not. This is still a good time to make sure people know
Roxy
about the Earned Income Credit (EIC), Child Tax Credit (CTC) and free tax filing
assistance.
Melinda Roxy, if people have already filed, is it too late to benefit from these credits?
No, it is not! For people who have already filed their tax return, first they will want to
look at the copy of their return to see if they claimed the EIC and CTC. If they did not,
Roxy and they are eligible, they can amend their tax return to claim these credits. This doesn't
just apply to this current tax year. In fact, eligible persons can claim EIC and CTC
refunds for up to three previous years!
That's good to know, that you can claim back three years. For the CTC, do you need to
Melinda
work to get the benefits? Must you have earned income for both of these credits?
Victor Is this fairly easy to figure out or should they get help?
Yes, you must have earned income for both of these credits. Earned income mainly
Roxy refers to salary, wages and tips. It also includes union strike benefits, self-employment
income, military combat pay and long-term disability benefits.
Victor, are you asking if it is fairly easy to determine if you are eligible to claim the
Roxy
EIC and CTC, or is it fairly easy to amend a tax return?
Rolanda Does the new stimulus payment affect the EIC or CTC?
Victor I meant to do the paper work, both current tax return and/or amended.
The economic stimulus payments that will be issued beginning in May do not affect
Roxy who can claim the EIC and CTC. The payments will not reduce an EIC or CTC
refund.
Laura_Lou Does Social Security count as earned income?
There are places that can help caregivers fill these out for free, right Roxy? If so,
Melinda maybe we can share that info with RAPPs. Also great would be information - in
different languages, on these benefits and you can help with that, right Roxy?
Victor Different languages as in English, Spanish and IRS?
To claim the EIC and CTC, one must file a tax return using Form 1040 or 1040A. To
claim the EIC, one must also file the Schedule EIC which is a form that asks for
basic information about the qualifying children — name, SSN, number of months
lived with the worker and relationship to the worker. To claim the CTC, one must
complete Form 8812 which requires a bit of math. One can complete these forms
alone, but if someone is nervous about making a mistake, there are Volunteer Income
Roxy Tax Assistance (VITA) sites across the country that have trained volunteer tax
preparers who can complete these forms. Call 1-800-829-1040 to locate the site
nearest you. Alternatively, one can try using an online program that guides people to
complete there tax returns. One such program is called I-CAN-E-FILE!,
www.icanefile.org. This program is available to people in California, Michigan,
New York, Pennsylvania, Montana and Alaska. If you are in another state and need
help, please contact me.
Social Security does not count as earned income for the EIC and CTC. Welfare
Roxy benefits, veterans’ benefits, unemployment compensation, interest and dividends are
also some of the types of income that are excluded from earned income.
Melinda Would a tax preparer automatically tell people they are eligible?
Melinda, I can provide you more info on finding free tax preparation to share with
RAPPs. The Center on Budget and Policy Priorities produces an EIC and CTC flyer
Roxy
in 21 languages. All fliers are posted to our website: www.cbpp.org/eic2008. The
fliers can be found under the "Outreach Tools" link.
Melinda Are the tax credits available at the state level as well?
Melinda Great, we'll post any other information on where to go for help after the chat!
Victor, I know it can seem like the IRS speaks a different language sometimes, but
make no mistake! are talking about claiming money that taxpayers have earned! This
Roxy
year, the EIC is worth a maximum of $4,716 and the CTC is worth a maximum of
$1,000 per child.
Tax preparers at VITA sites are generally trained to tell people that they are eligible
Roxy for the EIC and/or CTC and the amount of their expected refund. Some paid tax
preparers do this to, but many do not.
Roxy, what are some of the reasons that grandparents and other caregivers don't
Melinda
claim the tax? Is it mostly that they don't know they are eligible?
Laura_Lou In West Virginia AARP offers free tax service.
Melinda, excellent question about state level tax credits. There are about 19 states
that have a state EIC. It is a percentage of the federal EIC. Some states have
refundable state EICs and some are non-refundable. Either way, they can help
Roxy
maximize a worker's refund. I can send info on which states have state EICs and how
much they are worth to you to share with the RAPP network. There are no state
CTCs.
Rolanda Do you think caregivers may feel that the tax credit may jeopardize other benefits?
Rolanda So for clarification purposes, is the State EIC in addition to the federal EIC?
Yes, AARP has a free tax filing assistance program as well. In some locations, they
Roxy will only help people who are seniors, but in other locations they will help other
families as well.
Will the economic stimulus payment decrease the amount of federal income tax
Dawn
refund someone receives for 2008?
How long does the child have to have been living with the relative to be eligible for
Melinda the credits? Is custody an issue? For example, can someone without legal custody get
the credits?
There are a few reasons why grandparents and other caregivers may not claim the
EIC and CTC. Not knowing they are eligible is a major reason. Some caregivers may
think that a child has to be your son or daughter to claim these tax credits.
Roxy Grandchildren, step children, adopted children, brothers, sisters and foster children
(placed with the worker by an authorized agency) can be claimed as qualifying
children. Caregivers may also not claim the credits because they don't know how to
find help preparing tax returns.
Some caregivers are also concerned that claiming the EIC and CTC will impact their
Roxy benefits, such as foster care benefits. But, generally speaking, the receipt of one won't
jeopardize any other benefits they receive.
The State EIC is in addition to the federal EIC. In states that have a refundable state
Roxy EIC, workers will be able to claim a total EIC refund that is more than the $4,716
federal maximum.
Dawn, the economic stimulus payment will not decrease the amount of the federal
Roxy income tax refund someone receives for 2008. It is a payment and does not need to
be paid back and does not offset future refunds. Good question!
Roxy, it's great that the Center provides the fliers, in different languages, on your
website. RAPP facilitators can download them and make sure their caregivers
Melinda receive them at the meetings. If they've already filed and not claimed, what a
pleasant surprise to know they can go back three years. I hope we take advantage of
the information and use it at our next meetings!
I also found it interesting that your fact sheet - from the IRS - says that people who
Melinda don't normally file tax returns can get a stimulus payment If they file. Many low
income people who get social security benefits wouldn't be filing.
For the EIC and CTC, custody is not a factor in determining who can claim the
credits. A qualifying child must live with a worker for more than half the year. As
Roxy
long as this residency requirement is fulfilled (along with other basic requirements),
the person can claim the child for the tax credit.
Yes, the fact that many people who get social security benefits and veterans’ benefits
do not file a tax return, but must do so to receive the economic stimulus payments is
Roxy troubling. The Center and several other national organizations are currently involved
in efforts to simplify this process and make sure that this population will be able to
get help since filing a tax return will be confusing to many.
That's good to know Roxy, because it may be confusing and a bit scary. I know there
is a limit on the amount you can make for the stimulus package, Roxy. Do we have a
Melinda
figure and do we know when people will start receiving them? It's good to know they
won't have to be paid back!
Yes, my caregivers have been asking if they can get the stimulus if they are only on
carolyn
social security and don't file?
Those caregivers, Carolyn, may not have filed in the past if they only get social
Melinda security benefits. That's why it is troubling that they would have to file. They would
right Roxy?
The IRS will start sending checks in May and will continue through the end of the
year. Single filers who make less than $75,000 and joint filers with Adjusted Gross
Roxy Income of less than $150,000 will generally receive stimulus payments. Recipients
of social security benefits and veterans’ benefits must have at least $3,000 in benefits
to receive a payment.
Carolyn, you can let your caregivers know that they must have at least $3,000 in
Roxy
social security benefits to get the stimulus payment.
Melinda And that they must file, right Roxy?
Yes Melinda, they would have to file. The IRS is conducting targeted outreach by
matching information from the Social Security Administration to let people know
Roxy
that they need to file a tax return this one time (for the first time in however many
years) to get the payment.
Dawn If someone's only source of income is SSI are they eligible to receive a payment?
This would seem like an area where some quick publicity needs to be done with
Victor
senior caregivers
The IRS has designated March 29 as Super Saturday for Economic Stimulus
Payments and is hoping that folks around the country will plan events to help these
Roxy filers complete their tax return. However, this population does not need to file by
April 15. They have until October 15 since they don't owe taxes. The Center will be
encouraging our network to continue planning outreach events after March 29th.
Dawn, I don’t think that SSI alone is an eligible source of income for the stimulus
Roxy payment, but I will double check that. [Roxy followed up and here is her response:
SSI is not an eligible source of income for economic stimulus payments].
Roxy, that's good to know about the extended date for the stimulus package -- will
Melinda the Center on Budget and Policy Priorities have a flier or does or will the IRS? We
would like to get the word out as well!
Roxy Any estimates on the number of senior caregivers?
That was a good question about SSI. We can share the answer with the Network after
Melinda
the chat, Roxy.
The Center will be putting together outreach materials and the IRS does have 2 fliers,
Roxy one geared to Social Security recipients and the other one is for Veterans. I will send
you links to share. [Please see below for more information sent by Roxy].
Carolyn Thank you Roxy. That would be very helpful.
Carolyn- Can caregivers who are raising non-relative children qualify for the tax credits and
Yonkers stimulus payment?
Roxy, our network provides supportive services to grandparents and other relatives
Melinda
raising children. Many seniors would be interested in this info!
Carolyn-
The stimulus payment I am referring to is for a child.
Yonkers
Carolyn, I believe children claimed for the economic stimulus payment still must
meet the definition of a qualifying child for the CTC. Non-relative children would
have to be placed with the caregiver by an authorized agency as a foster child. I will
double check and let Melinda know. [Roxy followed up and here is her response: If a
Roxy caregiver is a child's legal guardian, then it seems like the child would fall under the
definition of a foster child for CTC/EIC purposes, because an authorized court
agency has placed the child with the guardian by order of the court. If the child
could not be claimed for the CTC, the additional stimulus payment for the child will
not be made].
Qualifying children for the EIC must be under age 19, or under age 24 if a full-time
student, or any age if he or she has a permanent and total disability. For the CTC,
Roxy
children must be under age 17. For the economic stimulus payments children must be
under age 17 by December 31, 2008.
Roxy, can you share any programs or promising practices that have been successful
Angela
in increasing EIC utilization rates?
Carolyn- That would be helpful to find out because we have at least one client who is raising
Yonkers an unrelated child and is her legal custodian, not foster parent.
Roxy will get any information on that point to me Carolyn and we'll share it with
Melinda
everyone!
Carolyn-
Thank you Melinda
Yonkers
We can all try to help our relative caregivers by making information on the tax
credits and the stimulus package available to them. Don't forget to check the website
Melinda
for fliers in different languages and Roxy will get me the information on the stimulus
package that you can share with them as well.
Angela, a good part of the Center's National Tax Credit Outreach Campaign is
dedicated to increasing EIC claims among eligible persons. It is estimated that
nationally, 15-20 percent of eligible persons DO NOT claim the EIC.
Promotion is very important. It is also important to address any
misconceptions people have about the EIC. It was first enacted in 1975 and
has changed a lot over the years. Some people know something about the EIC
from several years ago and would be surprised to learn that it may not be the
same today. Across the country, there are several tax credit outreach
coalitions that are dedicated to promoting the EIC, providing free tax filing
assistance and making sure that people know about the tax credits. I will send
Melinda info about how to locate a tax credit outreach coalition near you. If
Roxy
there isn't one in your area, we can help you start or expand tax credit
outreach efforts to help make sure workers claim all the money they've
earned. [Roxy followed up about information on tax credit outreach coalitions
and here is her response: RAPPs can check the following website: www. tax-
coalition.org/programs.cfm to learn about organizations providing free tax
filing assistance. People can search for tax credit outreach coalitions by
state that organize free tax filing assistance by visiting: www.cbpp.org/eitc-
partnership/state-links.htm. This info is updated annually by the IRS. If
someone doesn't see anything listed in their
area, they should contact us because we might know of a newly formed
partnership that has not developed relations with the IRS yet].
Please feel free to ask any other questions of Roxy. We'll make sure they are
answered and are part of the transcript we will have. Thanks so much Roxy,
for answering our questions. We don't want our caregivers to miss out on
Melinda
these important credits and the stimulus payments. All the information you
will share with me will be sent to our Network along with the transcript.
Thank you so much for joining us and sharing this information with us!
Rolanda Thank you Roxy
A transcript of this chat and the attachments will be available soon! Thank
Melinda
you all for joining us!
Thank you so much for allowing me to join this web chat. I hope the info was
helpful and as Melinda mentioned, if you have any unanswered questions,
Roxy
please feel free to contact me: caines@cbpp.org or 202-408-1080. Thanks so
much and have a great day!
Laura_Lou Thank You!
Carolyn- This was a helpful update. Thanks to Melinda and Rolanda for bringing to the
Yonkers RAPP
Roxy provided this additional information after the chat:
Tax Preparation Information:
Contact the IRS helpline: 1-800-829-1040. RAPPs can also identify AARP Tax-Aide sites by
visiting www.aarp.org/money/taxaide.
Fact Sheet on State Earned Income Tax Credits:
www.cbpp.org/eic2008/docs/state-eitc.pdf
Social Security and Veterans Fliers on the Stimulus Package:
Social Security Flier:
www.irs.gov/pub/irs-news/irs_pub_4663_ssa.pdf
Social Security Flier - In Spanish:
www.irs.gov/pub/newsroom/ssa_esp_flyer_sp.pdf
Veterans Affair Flier:
www.irs.gov/pub/irs-news/esp_p4664revised.pdf
Veteran’s Affair Flier – In Spanish:
www.irs.gov/pub/newsroom/va_esp_flyer_sp.pdf
More information on the Economic Stimulus Package can be found on the IRS website:
www.irs.gov.
Links to all Economic Stimulus Payment information are available. The website includes other
marketing materials, news releases, Public Service Announcements, Frequently Asked Questions
and a lot more.
The Center on Budget and Policy Priorities is almost done completing their outreach flier and
Roxy will send it to us when available.
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