Tax codes are hard to understand. That’s why the United Way of Greater Los Angeles has long worked to raise awareness around Volunteer Income Tax Assistance (VITA), a vital way to help low-income, working families in Los Angeles file their taxes and obtain tax credits to which they are entitled. And that’s why UWGLA and its partners work to educate low-income Angelenos about the broad range of tax credits that can help support them and their families.
A decade ago, UWGLA, along with key partners such as the City of Los Angeles and Koreatown Youth + Community Center, created what is now known as the Free Tax Prep LA program to spread the word as widely as possible about free tax filing services and the broad range of tax credits available to working, lower-income Angelenos. UWGLA also partners with trusted community based organizations like Mexican American Opportunity Foundation (MAOF) and El Centro de Ayuda to help individuals and families to submit their tax returns through the Free Tax Prep LA program both in person and virtually.
A recent webinar, “How the CalEITC Can Help Families Hit Hardest by the Pandemic,” demonstrated how VITA can be an essential tool in ensuring that working, low-income families get the income tax credits and stimulus payments that they need to weather the economic hardship brought on by the pandemic.
Every tax year, too many working families in California leave their own money on the table. UWGLA and our partners are working to reduce the nearly $580 million dollars in unclaimed tax refunds to as close to zero as possible.
Three key new or recently expanded initiatives will put money back in California families’ pockets:
- California Earned Income Tax Credit (CalEITC) has been expanded to ensure that all California tax filers can qualify for the CalEITC with reimbursements of almost $3,000 for families with 3 or more children.
- Young Child Tax Credit (YCTC) was created to provide additional help of up to $1000 to families with children under the age of six.
- Golden State Stimulus, a refundable tax credit of $600 to $1200 which was passed to help Californians survive the economic fall-out of the coronavirus pandemic.
All of these programs were created or greatly expanded over the last two years, but the benefits are only available if you file your taxes.
Participants in the webinar emphasized that even people who hadn’t planned to file by the extended tax deadline of May 17th still have plenty of time to claim their refunds and tax credits — until the middle of October.
“You need to file your taxes to be able to get the earned income tax credits back — we’re not going to give it to you for free, you need to file,” California Treasurer Fiona Ma told the attendees.
Unfortunately, community partners report that not everyone is aware of this free help, and unscrupulous scammers take advantage.
“I do get clients who come to the office with Form W-7 filled out, and they do pay to get this service. Clients pay over $100 to have this form filled and it’s not even done correctly,” said Elizabeth Cervantes of MAOF. “It breaks my heart how private companies are taking advantage of our community, so I encourage you to spread the word and let them know that they can get the services for free.”
The dollar value of California tax credits available can vary depending on family income and the number and age of children: they can return anywhere from a few hundred to more than $2000 to those who qualify. Andrew LePage of the California Franchise Tax Board (FTB) estimated that, according to the FTB, this year 4.1 million Californians will get earned income tax credits totaling roughly $1.24 billion in CalEITC and YCTC payments.
When state credits are combined with the Federal EITC, filers may qualify to access up to $10,000 in tax credits.
UWGLA will continue to work with our partners like MAOF and El Centro de Ayuda to spread the word about VITA and help ensure that Californians get their tax filings in and their tax credits back and have the resources they need to thrive.