BEYOND THE NUMBERS
This year’s Tax Day is April 18 — just days away. Here are five important facts to keep in mind about claiming valuable tax credits, filing deadlines, and available resources to help with filing.
Valuable tax credits can provide tax refunds, including the Earned Income Tax Credit (EITC) and Child Tax Credit. These credits lifted more than 28 million people above the poverty line or made them less poor in 2018. The EITC and Child Tax Credit help families address immediate needs like food, bills, and medical expenses. And research shows these credits also offer long-term benefits. For example, children whose families receive tax credits and similar financial supports have healthier birth weights and better childhood nutrition, along with higher school enrollment, test scores, high school graduation rates, and rates of college entry.
Additionally, 31 states plus the District of Columbia and Puerto Rico have state-level EITCs and 11 states have adopted a state child tax credit. State credits direct more money to eligible filers.
- People who aren’t required to file need to file to get the credits they qualify for. People who don’t have to file a tax return and don’t owe taxes can still benefit from doing so because they may get money back. In addition to the EITC and Child Tax Credit, people may be eligible for state-level credits or refunds if taxes withheld from their paychecks exceeded their tax liability.
Tax Day is the last day for some people to request a six-month extension if they need more time to file. If someone owes taxes, they should make their estimated tax payment on time to avoid penalties. There is no penalty for filing taxes after the deadline if someone is due a refund and doesn’t owe taxes. They do not need to request an extension and can file a tax return within three years of the original due date to claim tax credits they qualify for.
An extension can be especially helpful for people who need to apply for an Individual Taxpayer Identification Number (ITIN). ITINs are issued to people who are unable to get a Social Security number (SSN) and who need to file a tax return. The ITIN application can be complicated and must be attached to the tax return for which it is needed. Dependents listed on a return also need an ITIN if they cannot get an SSN.
The IRS requires an ITIN applicant to file their tax return by the IRS due date — this year, April 18 — to claim any tax credits they’re eligible for, such as the Child Tax Credit. If preparing the ITIN application may delay submitting the return, filing for an extension provides more time and maintains eligibility for those tax credits.
- The IRS grants extensions to people who have been affected by certain natural disasters. Depending on the disaster someone was affected by, people in a designated disaster area have until May 15, July 31, or October 16 to file their tax return and pay any taxes due. Additional time to file is especially valuable for people who are rebuilding their lives and may have had tax documents destroyed. As noted above, people who don’t owe taxes and are due a refund have up to three years to file a tax return.
The availability of free tax services will decrease after Tax Day. The IRS’ Volunteer Income Tax Assistance (VITA) and the AARP Foundation’s Tax-Aide programs deliver high-quality, free tax prep to millions of people with low and moderate incomes each year. Volunteers must pass an annual IRS test to be certified before providing trained tax help (unlike paid return preparers). VITA and Tax-Aide programs maintain an accuracy rate of over 90 percent for filing returns. While some VITA and Tax-Aide programs operate through the summer, and a few even year-round, many will close on Tax Day.
People who need more time to file, have filed an extension, or don’t have a filing requirement can get help filing their taxes for free through GetYourRefund.org until October 1, 2023. People can also file their own taxes for free using MyFreeTaxes.com through October 31.
CBPP leads a national outreach campaign to connect eligible people to resources to help claim the EITC and Child Tax Credit and to find free tax preparation. The Get It Back campaign provides resources such as a Tax Credit outreach toolkit and an EITC estimator. Learn more about promoting these tax credits and conducting outreach efforts.
- El crédito tributario por hijos
- Federal Payroll Taxes
- Federal Tax Expenditures
- Fiscal Stimulus
- Marginal and Average Tax Rates
- Tax Exemptions, Deductions, and Credits
- The Child Tax Credit
- The Earned Income Tax Credit
- The Federal Estate Tax
- Where Do Federal Tax Revenues Come From?
- Where Do Our Federal Tax Dollars Go?