Tax preppers say even though this season is far from normal, people shouldn’t be discouraged from filing. They may qualify for some serious cash.
“It’s actually one of the most effective ways for lifting people out of poverty because it does provide a huge cash influx into your household,” said Kelly Wagoner, director of Get Ahead Colorado. It’s a program through the Piton Foundation that focuses on raising awareness around free tax preparation services and tax credits.
“Cash is going back into your pocket. The only way to receive those though, of course, is to actually file taxes.”
On average, Colorado families and individuals receive about $2,200 back through tax credits, Wagoner said. People with kids may qualify for the Child Tax Credit and could get $2,000 per qualifying child with up to $1,400 of that being refundable. Individuals who earn a “low- to moderate-income” may also qualify for the Earned Income Tax Credit and receive up to $6,600, 10% of which the state will match.
More people will likely qualify for the Earned Income Tax Credit this year because they lost income due to the pandemic. The state also expanded eligibility for the state Earned Income Tax Credit to people who are not U.S. citizens and use an Individual Taxpayer Identification Number. Undocumented workers didn’t qualify for the tax credit at the state level before that. They still do not qualify for the credit at the federal level.
“After the CARES Act left out undocumented and ITIN filers from receiving the stimulus payment, Colorado sort of stepped up and said, ‘You know what? It's time we need to make sure that they get some of these refundable credits,’” said Courtney O’Reilly, director of the Free Tax Help Colorado, another program through Piton Foundation.
People who believe they qualified for the stimulus checks but did not receive them — or did not receive the correct amount — can also claim a Recovery Rebate Credit this year. They are eligible even if they’re not required to file a tax return because they don’t meet the income threshold.
Get Ahead Colorado and Tax Help Colorado have both restructured their programs to try and make their resources more accessible online. O’Reilley said last year, Tax Help Colorado filed about 8,000 tax returns statewide. The group hopes to reach about 7,000 this year.
“It's a more challenging year to get free tax assistance but we are here to help and try to help as many people as we can,” she said.
See if you qualify for free filing or tax credits
Editor's Note: A previous version of the story incorrectly stated undocumented immigrants would be eligible for the Earned Income Tax Credit at both the state and federal level. Undocumented immigrants remain ineligible for the federal credits. However, under new Colorado rules they can apply at the state level.