Special Collection: Earned Income Tax Credit (EITC) and Other Tax Credits

Over thirty-five years ago, Congress authorized a federal tax credit program called the Earned Income Tax Credit (EITC). It was conceived as an incentive to "make work pay" by giving low-income workers a refund for a percentage of their earnings. Since its inception, the EITC has been heralded as one of the most successful anti-poverty strategies in the United States, and numerous other tax credit programs have followed. Today there are tax credit programs for low-income workers with children and other dependents, for individuals seeking higher education, and outreach efforts designed specifically for underserved populations. This collection highlights key resources for the EITC, the Child Tax Credit, the American Opportunity Tax Credit, and others. It includes general information and fact sheets, reports and research, information about how tax credits effect eligibility for other federal benefits, resources to access state specific statistics and contact information, resources specific to three underserved populations (Native Americans, workers who are immigrants, and workers with disabilities), and provides information for on free tax preparation services across the country and ways to avoid predatory lending and tax services. Please contact the National Resource Center on Domestic Violence with comments, questions, or suggestions for new additions to this collection.

This Special Collection draws heavily from the work of the Center on Budget and Policy Priorities, one of the nation's premier policy organizations working at the federal and state levels on fiscal policy and public programs that affect low- and moderate-income families and individuals.

Special thanks to Anna Melbin, Founder of Catalyst Consulting and Training for developing this collection in partnership with the National Resource Center on Domestic Violence.

Table of Contents:

Introduction EITC: General Information and Fact Sheets Laws and Public Policy Reports and Research Tax Credits and Public Benefits Eligibility State Specific Information For Domestic Violence Survivors Underserved Populations Native Americans Workers who are Immigrants Workers with Disabilities Tax Credits for Families with Children Child Tax Credit Child and Dependent Care Tax Credit Adoption Tax Credit Higher Education Tax Credits Free Tax Preparation Services

Acronym & Abbreviation Key Click here for a list of organizational, governmental, and trade-related acronyms and terms contained in the annotated entries of this special Earned Income Tax Credit collection.

Introduction | Back to top

The Earned Income Tax Credit (EITC or EIC), is a fully refundable federal income tax credit for low- to moderate-income working individuals and families. This tax credit program was first authorized by Congress in 1975, and since that time has become one of the most successful anti-poverty programs in the U.S. It has been legislatively expanded many times over the past 35 years, most notably through the Tax Reform Act of 1986 and most recently through the American Recovery and Reinvestment Act of 2009. Originally the program was conceived to "make work pay", to offset the burden of social security taxes and provide an incentive for work.

The EITC equals a fixed percentage of earnings, up to a maximum amount; when the EITC exceeds the amount of taxes owed it results in a fully refundable tax credit. The maximum depends on the number of children in the family. For example, for tax year 2012 the maximum EITC for a person or couple without qualifying children is $475, with one qualifying child is $3,169, with two qualifying children is $5,236, and with three or more qualifying children is $5,891 (National EITC Outreach Campaign, 2012). In 2011, over 27 million eligible families and individuals claimed Earned Income Credits worth $59.7 billion (National EITC Outreach Campaign, 2011). Approximately 6.6 million people, half of them children, are lifted out of poverty annually due to the EITC (Internal Revenue Service, 2012). Yet despite this success, the Internal Revenue Service estimates that each year between 15 - 25% of eligible workers do not claim the EITC (2012). In response, advocacy groups have created and launched outreach campaigns, to raise awareness about the EITC and increase the number of eligible participants.

Due to the relative success of the EITC, other tax credit programs have also been authorized. These include tax credits specifically for families with children and other dependents, tax credits for higher education activities, incentive programs for employers, and outreach efforts specifically for traditionally underserved populations. The Child Tax Credit and the Child and Dependent Care Tax Credit programs offset expenses related to caring for children and other dependents, while the American Opportunity Tax Credit can be claimed against tuition and other expenses related to higher education. This collection highlights key resources for theses tax credit programs, and others. It includes general information and fact sheets, reports and research, information about how tax credits effect eligibility for other federal benefits, resources to access state specific statistics and contact information, resources specific to three underserved populations and provides information for on free tax preparation services across the country.

EITC: General Information and Fact Sheets | Back to top

This section provides resources with summaries of the EITC and basic facts about eligibility, credit levels, and how to apply for this tax credit program. Information in this section is general and not specific to domestic violence survivors or other underserved populations.

• EITC Homepage | HTML (3 p.)
  by the Internal Revenue Service
  This site provides an overview of the EITC, including basic eligibility requirements. Links are provided for free tax preparation sites and fillable tax forms.
  + View Summary

• EITC Central | HTML
  by the Internal Revenue Service
  The IRS maintains this site as a comprehensive online resource for EITC information, including a "What's Hot" page to provide timely updates on the EITC program, including legal and administrative changes.
  + View Summary

• National Earned Income Tax Credit Outreach Campaign | HTML
  from the Center on Budget and Policy Priorities
  In 1989, the CBPP launched its first annual EITC outreach campaign to promote the EITC, the Child Tax Credit and free tax filing assistance. This site provides numerous resources related to the campaign, including an Outreach Kit.
  + View Summary

• Podcast: The Earned Income Tax Credit | HTML
  by the National EITC Outreach Campaign of the Center on Budget and Policy Priorities (January 29, 2010)
  This question and answer session provides clear information about what the EITC is, who is eligible, and where to access additional resources.
  + View Summary

• Earned Income Tax Credit | HTML
  from Wikipedia
  This page provides a good overview of the history and purpose of the EITC, as well as details about how to qualify and an easy to read chart of refund levels.
  + View Summary

• Earned Benefit Toolkit: Employer Guide | PDF (59 p.)
  by the National Human Service Assembly (2010)
  This comprehensive manual is for nonprofit organizations who are interested in promoting access to earned benefits, including tax credits, among their lower earning employees.
  + View Summary

Laws and Public Policy | Back to top

The EITC and other tax credit programs are authorized by various federal and state laws. The most recent relevant federal legislation is the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (Act). This Act was passed by Congress and signed into law by President Obama in December 2010. The primary focus of the Act is to extend provisions under the Economic Growth and Tax Relief Reconciliation Act of 2001 and the Jobs and Growth Tax Relief Reconciliation Act of 2003 (commonly referred together as the "Bush tax cuts"). The Act also extends a few key provisions of the American Recovery and Reinvestment Act of 2009, such as increases in the Child Tax Credit (CTC). This section includes resources on legislation and public policies relevant to the EITC and CTC, with a focus on policy analysis and useful information for the average reader. High level detail and technical information can be found at the U.S. Senate and U.S. House of Representatives websites.

• Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010: Information Center | HTML
  by the Internal Revenue Service (Updated January 2011)
  The Act was passed and signed into law in December 2010. It extends Bush-era tax cuts, unemployment insurance, and specific provisions under ARRA including key tax credit programs for families. This page provides an overview of the Act and implications for tax payers.
  + View Summary

• Policy Basics: The Child Tax Credit | HTML
  by the Center on Budget and Policy Priorities (Updated May 2012)
  This fact sheet provides basic details about the CTC, including who is eligible and the effect of the American Recovery and Reinvestment Act of 2009.
  + View Summary

• H.R. 508: Child Tax Credit Preservation Act of 2011 | HTML
  from govtrack.us
  If signed into law H.R. 508 would amend the Internal Revenue Code of 1986 to make permanent the child tax credit and to allow for adjustments for inflation.
  + View Summary

• The Child Tax Credit: Economic Analysis and Policy Options | HTML (2 p.)
  by Margot L. Crandall-Hollick for Economic Legislation (August 2, 2011)
  This article discusses the current CTC, and examines the economic impact and discusses policy options for post-2012.
  + View Summary

• New Legislation Enacted Determining How Tax Refunds and Credits are Treated by Other Public Benefit Programs | PDF (1 p.)
  by the National EITC Outreach Campaign of the Center on Budget and Policy Priorities (2011)
  New legislation signed in December 2010 expanded certain tax credits and simplified how EITC and CTC refunds affect eligibility for other public benefits. This document explains the basics of the legislation and provides references for the statutory language.
  + View Summary

• New State Data Show EITC’s Widespread Anti-Poverty Impact | HTML
  by Jane Williams and Elizabeth Kneebone for The Hatcher Group (January 2013)
  This blog is dedicated to providing up-to-date information on tax credit legislative activity, particularly introduced bills and signed law that relate to tax credit programs for families.
  + View Summary

Reports and Research | Back to top

This section includes a few key reports highlighting research on the EITC, tax credits for families with children, and the use of the Volunteer Income Tax Assistance program in Native American communities. Information about specific states' efforts to increase access to the EITC is also included.

• State Efforts to Support Low-Income Families and Communities Through the Earned Income Tax Credit | PDF (13 p.)
  by Courtney Smith for the NGA Center for Best Practices (February 2006)
  Despite the success of the EITC, many eligible workers do not claim the tax credit. This paper summarizes a number of states' efforts to increase awareness of, and participation in, the EITC.
  + View Summary

• Using the Earned Income Tax Credit to Stimulate Local Economies | PDF (9 p.)
  by Alan Berube for The Brookings Institution (2006)
  This paper discusses how the EITC can be used not only as an anti-poverty strategy, but as a tool for investing in local communities.
  + View Summary

• The Earned Income Tax Credit at Age 30: What We Know | PDF (40 p.)
  by Steve Holt for The Brookings Institution (2006)
  This paper discusses the first thirty years of the EITC, which began in 1975. A summary of the history, key research, and proposals to further improve the tax credit are included.
  + View Summary

• Volunteer Income Tax Assistance (VITA) Sites in Native Communities | PDF (4 p.)
  by Kristen Wagner & Amy Locklear Hertel for the Center for Social Development, Washington University (January 2010)
  This paper discusses the results of a research study with American Indian/Alaskan Natives/Native Hawaiians, to better understand how the EITC can benefit Native families and communities.
  + View Summary

• Making Care Less Taxing: Improving State Child and Dependent Care Tax Provisions | PDF (60 p.)
  by the National Women's Law Center (April 2011)
  Many states do not offer tax assistance for low income families with care-related expenses. This report is designed to help state policy makers and advocates understand the benefits of care-related tax credits and assist them in implementing CDCTC provisions in their state.
  + View Summary

• Improving Access to Public Benefits: Helping Eligible Individuals and Families Get the Income Supports they Need | PDF (20 p.)
  by Shelly Waters Boots, for the Ford Foundation, the Open Society Institute, and the Annie E. Casey Foundation (April 2010)
  This report discusses several federal public benefit programs, including the EITC, and the importance of having all these programs accessible to low-income people in order to reduce poverty and increase economic stability.
  + View Summary

Tax Credits and Public Benefits Eligibility | Back to top

Many eligible taxpayers do not take advantage of the various tax credit and income deduction programs available for fear of losing their public benefits, such as TANF, food stamps, and SSI. The resources in this section provide general information about how the EITC and other tax credit programs impact eligibility for other types of federal assistance. Also included is a report outlining the importance of using various federal benefit programs, including tax credits, as compliments in a larger anti-poverty strategy.

• Q&A: Public Benefits | PDF (1 p.)
  by the National EITC Outreach Campaign of the Center on Budget and Policy Priorities (2011)
  This fact sheet provides answers to basic questions about how the EITC and CTC affect eligibility for public assistance benefits.
  + View Summary

• New Legislation Enacted Determining How Tax Refunds and Credits are Treated by Other Public Benefit Programs | PDF (1 p.)
  by the National EITC Outreach Campaign of the Center on Budget and Policy Priorities (2011)
  New legislation signed in December 2010 expanded certain tax credits and simplified how EITC and CTC refunds affect eligibility for other public benefits. This document explains the basics of the legislation and provides references for the statutory language.
  + View Summary

• AFI Guidance on Tax Refunds and Public Benefits | HTML (2 p.)
  by the Assets for Independence Resource Center (February 4, 2011)
  This document explains how provisions under new tax legislation affect eligibility for federally funded services, particularly the Assets for Independence program.
  + View Summary

• Improving Access to Public Benefits: Helping Eligible Individuals and Families Get the Income Supports they Need | PDF (20 p.)
  by Shelly Waters Boots, for the Ford Foundation, the Open Society Institute, and the Annie E. Casey Foundation (April 2010)
  This report discusses several federal public benefit programs, including the EITC, and the importance of having all these programs accessible to low-income people in order to reduce poverty and increase economic stability.
  + View Summary

State Specific Information | Back to top

This section focuses on tax credit information that can be accessed for individual states, such as participation rates, legislative activity, and state specific contact information.

• Tax Credits For Working Families | HTML
  by The Hatcher Group
  This is an online resource for research and information about the EITC, CTC, CDCTC, and the Property Tax Circuit Breaker. The site also includes a State Resource Map, to locate extensive state-specific information about these tax credit programs, resources and legislative updates specific to each state, and contacts for additional information.
  + View Summary

• State Efforts to Support Low-Income Families and Communities Through the Earned Income Tax Credit | PDF (13 p.)
  by Courtney Smith for the NGA Center for Best Practices (February 2006)
  Despite the success of the EITC, many eligible workers do not claim the tax credit. This paper summarizes a number of states' efforts to increase awareness of, and participation in, the EITC.
  + View Summary

For Domestic Violence Survivors | Back to top

Domestic violence survivors often experience under- or un-employment, economic instability, and poverty as a result of the economic abuse they experience. Abusers may prohibit survivors from accessing bank accounts, assets and opportunities for increasing skills and employment. Indeed, a lack of financial resources is very often the primary barrier for survivors wanting to leave the abusive relationship. Therefore, helping survivors increase their economic stability and independence is not only a critical component of safety planning, but may also facilitate a successful escape from an abusive partner. The EITC is a proven anti-poverty strategy in the U.S., and one that advocates can help survivors access. Along with other federal benefits and tax credit programs, the EITC and CTC can help a survivor regain financial footing and therefore help reclaim autonomy. Included in this section are resources specific to domestic violence survivors and advocates working with survivors, such as tips for increasing a survivor access to the EITC, tax information provided by the IRS, and links for additional information.

• Tax Credits and Domestic Violence Survivors | PDF (4 p.)
  by the Center on Budget and Policy Priorities (2013)
  This fact sheet describes challenges for domestic violence survivors when it comes to tax preparation and reviews available resources that may be a helpful support, such as free tax filing assistance and refundable tax credits.
  + View Summary

• Helping Domestic Violence Survivors Claim the Earned Income Tax Credit | HTML (1 p.)
  by the Assets for Independence Resource Center
  This brief fact sheet provides an overview of the EITC and how this anti-poverty strategy can be used specifically with domestic violence survivors. Links to additional resources are included.
  + View Summary

• Innocent Spouse Relief (Including Separation of Liability and Equitable Relief) | HTML (1 p.)
  by the Internal Revenue Service
  In some instances married people can get relief from joint tax liability. This site describes three types of relief, how they work together, and links to access the appropriate forms.
  + View Summary

• Your Money Matters: Tax Information for Survivors of Domestic Violence | PDF (2 p.)
  by the Internal Revenue Service
  This brochure provides basic information about Innocent Spousal Relief, including what documentation is needed and privacy issues.
  + View Summary

Underserved Populations | Back to top

Advocates, organizations and policy makers across the United States are concerned with increasing the economic stability of underserved populations. Numerous strategies are utilized towards this end, including tax credit and deduction programs. This section focuses on three specific underserved populations: Native Americans, Workers who are Immigrants, and Workers with Disabilities. Resources here include tax preparation services, research on how to increase access to tax credit programs, and specific tax codes relevant to these three underserved groups.

Native Americans

• Volunteer Income Tax Assistance (VITA) Sites in Native Communities | PDF (4 p.)
  by Kristen Wagner & Amy Locklear Hertel for the Center for Social Developent, Washington University (January 2010)
  This paper discusses the results of a research study with American Indian/Alaskan Natives/Native Hawaiians, to better understand how the EITC can benefit Native families and communities.
  + View Summary

• Building Native Communities: A Guide to Claiming the Earned Income Tax Credit | PDF (32 p.)
  by the First Nations Development Institute
  This comprehensive workbook is designed to help Native Americans access the EITC. It includes practical information, interactive exercises, a glossary of terms, and additional resources.
  + View Summary

• A Tribal Leader's Guide to Launching an Earned Income Tax Credit (EITC) Campaign | PDF (68 p.)
  by First Nations Development Institute (April 2005)
  This manual is designed for Native American leaders and community members who are interested in launching an EITC awareness campaign. It includes an overview of the EITC, concrete strategies and tips, and outreach campaign tools and resources.
  + View Summary

Workers who are Immigrants

• Q & A: Eligibility Rules for Immigrant Workers | PDF (2 p.)
  by the National EITC Outreach Campaign of the Center on Budget and Policy Priorities
  This fact sheet provides information for about EITC and CTC eligibility for working people who are immigrants.
  + View Summary

• Child Tax Credits for Illegal Immigrants | PDF (2 p.)
  by Peter A. Schulkin for the Center for Immigration Studies (November 2010)
  This memorandum explains how immigrants without a social security number can access the CTC.
  + View Summary

Workers with Disabilities

• Living and Working with Disabilities: Tax Benefits and Credits | PDF (2 p.)
  by the Internal Revenue Service
  This brochure outlines the various tax deduction, tax credit, and income inclusion programs available to people with disabilities.
  + View Summary

• Disability and Earned Income Tax Credit | HTML
  by the Internal Revenue Service
  This page spells out EITC eligibility criteria for people with disabilities and people with children with disabilities.
  + View Summary

• Credit for the Elderly or Disabled: For use in preparing 2012 Returns | PDF (15 p.)
  by the Internal Revenue Service
  This booklet describes a tax credit available to qualifying individuals over the age of 65 or under the age of 65 who retired on permanent and total disability.
  + View Summary

Tax Credits for Families with Children | Back to top

A number of federal tax credit programs are designed specifically for workers with children and dependents. The goal of these programs is to help workers maintain employment by offsetting the costs related to caring for children and dependents. This section includes general information about tax credits for families, as well as specific information about the Child Tax Credit, the Child and Dependent Care Tax Credit, and the Adoption Tax Credit.

• A Reference Manual for Child Tax Benefits | PDF
  by Elaine Maag, Stephanie Rennane, and C. Eugene Steuerle for The Urban–Brookings Tax Policy Center (April 2011)
  This manual describes a number of child-related provisions in the individual income tax code, and describes the specific benefits for each targeted group.
  + View Summary

• Tax Credits For Working Families | HTML
  by The Hatcher Group
  This is an online resource for research and information about the EITC, CTC, CDCTC, and the Property Tax Circuit Breaker. The site also includes a State Resource Map, to locate extensive state-specific information about these tax credit programs, resources and legislative updates specific to each state, and contacts for additional information.
  + View Summary

• The Tax Policy Center Briefing Book: Taxation and the Family | HTML
  by the Tax Policy Center of the Urban Institute and the Brookings Institution (2008)
  This chapter explains how the tax system affects couples and families with children. It covers the EITC, CTC, subsidies for childcare, and marriage incentives and penalties.
  + View Summary

• Q & A: Non Traditional Families | PDF (2 p.)
  by the National EITC Outreach Campaign of the Center on Budget and Policy Priorities
  This fact sheet provides information about IRS rules around custody status and eligibility for the EITC and CTC. Information for families based on differing marital status is also included.
  + View Summary

• Comparing the Eligibility Requirements for the EITC and CTC | PDF (1 p.)
  by the Center on Budget and Policy Priorities
  This is an easy to read chart comparing the basic eligibility requirements for these two tax credit programs.
  + View Summary

Child Tax Credit
The Child Tax Credit (CTC) is a federal tax credit designed to help working families offset the cost of raising children. First created in 1997, the CTC was expanded through the Economic Growth and Tax Relief Reconciliation Act of 2001, and then again through ARRA in 2009, to provide greater tax relief and make a portion of the credit refundable. Those improvements were then extended through December 31, 2012 in The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. The credit is currently worth up to $1,000 per child under age 17 and is subtracted from the amount of income taxes the family owes. If the CTC exceeds the amount of taxes owed, a portion of the difference is refundable. Beginning in 2013, the CTC is scheduled to return to a $500 credit that is nonrefundable for most families. This section provides information about the CTC including relevant legislative activity, eligibility, and how to access the appropriate application forms.

• Policy Basics: The Child Tax Credit | PDF (1 p.)
  by the Center on Budget and Policy Priorities (Updated May 2012)
  This fact sheet provides basic details about the CTC, including who is eligible and the effect of the American Recovery and Reinvestment Act of 2009.
  + View Summary

• Ten Facts about the Child Tax Credit | HTML (1 p.)
  by the Internal Revenue Service (February 10, 2011)
  This page provides quick facts about the CTC including qualifications, credit levels, limitations, and links to application forms.
  + View Summary

• The Child Tax Credit: Economic Analysis and Policy Options | HTML (2 p.)
  by Margot L. Crandall-Hollick for Economic Legislation (August 2, 2011)
  This article discusses the current CTC, and examines the economic impact and discusses policy options for post-2012.
  + View Summary

• Child Tax Credit: For use in preparing 2012 Returns | PDF (16 p.)
  by the Internal Revenue Service (December 2012)
  This booklet provides basic facts about the CTC, as well as worksheets to specifically determine the amount of CTC to claim on tax returns.
  + View Summary

Child and Dependent Care Tax Credit
The Child and Dependent Care Tax Credit (CDCTC) is a federal tax credit designed to help working families pay for the care of qualified individuals including children, adult dependents, or an incapacitated spouse. The goal is to offset care-related expenses in order for the taxpayer to maintain employment. The CDCTC is a percentage of the care-related expenses and varies based on the taxpayer's adjusted gross income. Currently, taxpayers can claim up to $3,000 in dependent care expenses for one child/dependent and $6,000 for two children/dependents. The credit is up to 35% of these expenses, depending on income; the lower the income the higher the percentage of care-related expenses that can be claimed. Current CDCTC benefits are applicable through December 31, 2012, under The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. This section provides resources with general information about the CDCTC, including eligibility and how to access the appropriate forms.

• Quick Facts: Child and Dependent Care Tax Credit (CDCTC) | HTML (6 p.)
  by the Tax Policy Center of the Urban Institute and the Brookings Institution (2010)
  This page provides information about what the CDCTC entails, eligibility and who benefits, and proposed changes for the future.
  + View Summary

• Ten Things to Know About the Child and Dependent Care Credit | HTML (1 p.)
  by the Internal Revenue Service (March 2011)
  This page provides basic facts about the CDCTC including qualified expenses, credit levels, limitations, and links to relevant forms.
  + View Summary

• Paying for Child Care? The Child and Dependent Care Credit Could Help | PDF (2 p.)
  by the National EITC Outreach Campaign of the Center on Budget and Policy Priorities
  This fact sheet provides information about the CDCTC, eligibility, benefits to families, how to claim this credit, and where to find additional resources.
  + View Summary

• Making Care Less Taxing: Improving State Child and Dependent Care Tax Provisions | PDF (60 p.)
  by the National Women's Law Center (April 2011)
  Many states do not offer tax assistance for low income families with care-related expenses. This report is designed to help state policy makers and advocates understand the benefits of care-related tax credits and assist them in implementing CDCTC provisions in their state.
  + View Summary

• Child and Dependent Care Expenses: For use in preparing 2012 Returns | PDF (23 p.)
  by the Internal Revenue Service (October 2012)
  This booklet provides an overview of the CDCTC, explains which expenses qualify, and includes charts for determining eligibility and worksheets for correctly claiming the CDCTC on tax returns.
  + View Summary

Adoption Tax Credit
The Adoption Tax Credit (ATC) is a program for low income people who have expended qualified out-of-pocket expenses related to the adoption of a child. The credit amount depends on the expenses incurred. Families who have adopted children with special needs can claim the full credit, even if the expenses are less than the credit amount. Adoptions of children with special needs from the foster care system are also fully eligible, even if no adoption expenses were incurred. The ATC has been enhanced for the years 2010 - 2012, and is currently fully refundable. This section provides basic information about the ATC and explanations of eligibility and how to apply.

• Adoption Tax Credit Now More Valuable for Working Families | PDF (2 p.)
  by the National EITC Outreach Campaign of the Center on Budget and Policy Priorities (2011)
  The Adoption Tax Credit allows low and moderate income workers to receive a refund against adoption related expenses. This fact sheet explains the ATC eligibility requirements and provides information for applying.
  + View Summary

• Topic 607 - Adoption Credit and Adoption Assistance Programs for 2010 and 2011 | HTML ( p.)
  by the Internal Revenue Service
  This page provides general information about the ATC and changes to allowable expenses in the past few years.
  + View Summary

Higher Education Tax Credits | Back to top

The American Opportunity Tax Credit (AOTC), which expanded and renamed the already-existing Hope and Lifetime Learning credit, can be claimed for tuition and certain fees for higher education. This tax credit program was extended by the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010, through December 31, 2012. This section provides general information about the AOTC and allowable expenses.

• Tax Incentives for Higher Education | HTML (1 p.)
  by the Internal Revenue Service
  This page provides information about the Hope and Lifetime Learning credit, tuition deductions, and interest deductions for qualified student loans.
  + View Summary

• American Opportunity Tax Credit: Questions and Answers | HTML (3 p.)
  by the Internal Revenue Service
  This page provides basic information about the AOTC, including how to qualify, which expenses are allowable, and where to access application forms.
  + View Summary

Free Tax Preparation Services | Back to top

Communities all across the country have free tax preparation services for individuals and families. The largest is the IRS sponsored Volunteer Income Tax Assistance (VITA) program, which provides free tax preparation and resources for low and moderate income (generally $49,000 and below) people who cannot prepare their own tax returns. Certified volunteers receive training on basic tax return preparation as well as special tax credits such as the EITC and CTC. VITA sites are typically located at easily accessible places such as community centers, libraries, schools, and shopping malls. Most locations also offer free electronic filing. The IRS also sponsors tax service programs for people over 60 years of age and military personnel. This section provides information about the VITA program, research on the effectiveness of the services, and where to find free tax preparation services by geographic area. Also included is information about the predatory lending practice of Refund Anticipation Loans.

The National Community Tax Coalition is the largest membership organization for community-based organizations offering free tax and financial services to low-income working families in the U.S. The Coalition has over 2000 members and engages in federal and state advocacy, as well as provides training and resources. The site has links to resources as well as where to find free tax services by state and by member directory.

• Free Tax Return Preparation for You by Volunteers | HTML PDF (2 p.)
  by the Internal Revenue Service
  The IRS VITA and Tax Counseling for the Elderly programs offer free tax help for taxpayers who qualify. This site provides basic information about these programs, how to find services by state, and what type of documentation is needed.
  + View Summary

• About AARP Foundation Tax-Aide | HTML (1 p.)
  by the AARP Foundation (Updated January 2012)
  The AARP Foundation Tax-Aide is an all-volunteer free tax counseling and preparation service for low and middle income people. The program also offers assistance for people who cannot leave their home ("shut ins").
  + View Summary

• Refund Anticipation Loan | HTML
  from Wikipedia
  Refund Anticipation Loans (RALs) are high-interest loans tax payers can purchase to speed up delivery of their tax refunds. Many policy makers and advocacy groups believe RALs to be a predatory lending practice. This site provides the history of RALs, rates and risks, and current relevant policy efforts.
  + View Summary

• Don't Pay to Borrow Your Own Money: The Risks and Costs of Tax Refund Anticipation Loans | PDF (2 p.)
  by the National Consumer Law Center
  This brochure briefly outlines what RALs are, the risks associated, and alternative methods of accessing tax refunds quickly.
  + View Summary