Down Debt

Detroit residents can get free tax assistance. Here’s what you need to know.

Detroiters may owe the federal government money, but first they need to make sure they file their taxes to get it.

The City of Detroit and nonprofits are working together to help residents access the Child Tax Credit and Earned Income Tax Credit – dollars that can help families stay out of poverty . Free help is also available for those who qualify.

“The sooner you file, the sooner the refund can come back,” Mayor Mike Duggan said at a Monday news conference.

Following:Tax tips 2022: How to get child tax credits, charitable deductions and free help

Following:The IRS cashed the check but asked these taxpayers to resubmit the returns

Families received monthly child tax credit payments for six months, until December last year. It could have been $1,500 or $1,800 per child, depending on the age of the child.

The second half of the tax credits can be claimed by filing 2021 tax returns. Families may be able to get another $1,500 or $1,800 for each qualifying child. Those who didn’t get the monthly installments could get a total of $3,000 or $3,600 per child, depending on their age – in other words, credits they may have missed last year.

“In Detroit, with this first half of the Child Tax Credit, more than $100 million has been poured into the pockets of Detroit families,” said H. Luke Shaefer, director of the Poverty Solutions Initiative at the ‘University of Michigan. “Families who got the Child Tax Credit were much more likely to say their finances are better off today than a year ago. Parents who said they spent the Child Tax Credit to repay their debts were much more likely to report having a more manageable financial burden of debt.”

About 72% of Detroit families said they receive monthly child tax credits, but there are still parents who think they don’t qualify, Shaefer said, while odds are high. they are eligible.

It is important that filers be on the lookout for a document from the Internal Revenue Service – letter 6419 – detailing the amount they received. They will need the letter to file their 2022 taxes and get the maximum payments.

Detroiters should also be aware of the Earned Income Tax Credit, which can help those earning less than $57,414 reduce the taxes they owe and increase their refund. The amount of the refund depends on income, filing status and the number of eligible children claimed on tax returns, according to a news release.

A single person without children who works and earns less than $21,430 could recover up to $1,502. A married couple with three children, who files a joint return and earns less than $57,414 combined can get $6,728, the news release notes.

On average, Detroit residents claimed $56 million in earned income tax credits each year.

“The Child Tax Credit and Earned Income Tax Credit provide vital income to our working families and these programs…meet the needs of our children,” said Darienne Driver Hudson, President and CEO from the United Way branch for southeast Michigan.

In December, child tax credit payments withheld $3.7 million lift children out of poverty, according to Columbia University’s Center on Poverty and Social Policy.

The payments “protected family finances amid the COVID-19 pandemic, increased families’ ability to meet their basic needs, reduced child poverty and food inadequacy, and had no effect noticeable negative impact on parental employment,” the researchers wrote.

The number of children living in poverty is expected to increase this month in the absence of the monthly Child Tax Credit payment. In other words, the researchers estimated that 3.7 million children could be living in poverty at the start of the year.

Parents tended to use monthly payments to pay off debt and school-related expenses, such as tuition, childcare, supplies and transportation, the Census Bureau said last fall. .

“Families can use the money they get when they file their taxes to invest in their future. They can invest in education or invest in a new car to get to work or new work clothes” , Shaefer said.

HOW TO GET HELP

  • Free tax assistance is available for those earning less than $57,000. The City of Detroit works with the Wayne Metropolitan Community Action Agency and the Accounting Aid Society for this service. Make an appointment by calling the United Way 2-1-1 Hotline for Southeast Michigan or go to www.getthetaxfacts.org/.
  • For those filing on their own, United Way for Southeast Michigan can offer free advice at www.unitedwaysem.org/taxes or by calling 1-866-698-9435 from 10 a.m. to 10 p.m. daily .
  • People can also visit www.waynemetro.org/taxes or call Wayne Metro directly at 313-388-9799.
  • Call the Accounting Help Society at 313-556-1920.

“We don’t want anyone leaving money on the table. We want everyone in the city of Detroit to get their due, get their credits and get their money back,” said Louis Piszker, CEO of Wayne Metro. .

Free Press editor Susan Tompor contributed to this report.

Nushrat Rahman covers economic mobility issues for the Detroit Free Press and Bridge Detroit as a staff member with Report for America, an initiative of the GroundTruth Project. Make a tax-deductible contribution to support his work at bit.ly/freepRFA.

Contact Nushrat: [email protected]; 313-348-7558. Follow her on Twitter: @NushratR. Sign up for the Bridge Detroit newsletter. Become a subscriber to Free Press.