Detroiters may be owed money from the federal government, but they need to make sure to file their taxes first to get it.
The City of Detroit and nonprofit organizations 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 your returns, the sooner the refund can come back,” Mayor Mike Duggan said during a Monday news briefing.
Families received monthly Child Tax Credit payments for six months, until December of last year. This could have amounted to $1,500 or $1,800 per child, depending on a child’s age.
The second half of the tax credits can be claimed by filing 2021 income tax returns. Families may be able to get another $1,500 or $1,800 for each qualifying child. Those who did not receive the monthly payments could get a total of $3,000 or $3,600 per child, based on their age — in other words, the credits they may have missed out on last year.
“In Detroit, with that first half of the Child Tax Credit we saw over $100 million dollars flow into the pockets of Detroit families,” said H. Luke Shaefer, director of the University of Michigan Poverty Solutions initiative. “Families that got the Child Tax Credit were significantly more likely to say their financial situation is better today than it was a year ago. Parents who said they spent the Child Tax Credit on paying down debt were significantly more likely to report having a more manageable debt load.”
About 72% of Detroit families reported receiving monthly Child Tax Credits but there are still those parents who think they do not qualify, Shaefer said, when there is a good chance that they are eligible.
It’s important for tax filers to be on the look out for a document from the Internal Revenue Service — the Letter 6419 — detailing how much they received. They will need the letter to file 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 refund amount depends on income, filing status and the number of qualifying children claimed on tax returns, according to a news release.
A single person with no kids who works and makes less than $21,430 could get as much as $1,502 back. A married couple with three kids, who files a joint return, and is making under $57,414 combined can get $6,728, the news release notes.
On average, Detroiters have claimed $56 million in earned income tax credits each year.
“Both the Child Tax Credit and Earned Income Tax Credit provide vital incomes for our working families and these programs … support the needs of our children,” said Darienne Driver Hudson, president and CEO of the United Way for Southeastern Michigan.
In December, Child Tax Credit payments kept 3.7 million children out of poverty, according to Columbia University’s Center on Poverty and Social Policy.
The payments “buffered family finances amidst the continuing COVID-19 pandemic, have increased families’ abilities to meet their basic needs, have reduced child poverty and food insufficiency, and have had no discernible negative effects on parental employment,” researchers wrote.
The number of kids in poverty was expected to increase this month absent the monthly Child Tax Credit payment. In other words, researchers estimated that 3.7 million children could be living in poverty during the beginning of the year.
Parents tended to use the monthly payments to pay off debt and school-related expenses, such as tuition, child care, supplied and transportation, according to the Census Bureau last fall.
“Families can use that pot of money that they get when they file their taxes to make investments into their future. They can invest in education or they can invest in a new car to get to work or new work clothes,” Shaefer said.
HOW TO GET HELP
- Free tax help is available for those making under $57,000. The City of Detroit is working with the Wayne Metropolitan Community Action Agency and Accounting Aid Society for this service. Make an appointment by calling the United Way for Southeastern Michigan’s 2-1-1 hotline or go to www.getthetaxfacts.org/.
- For those filing themselves, the United Way for Southeastern Michigan can offer free guidance 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 Aid Society at 313-556-1920.
“We don’t want anybody to leave any money on the table. We want everyone in the city of Detroit to get what is coming to them, to get their credits, and to get their refunds,” said Louis Piszker, Wayne Metro CEO.
Free Press staff writer Susan Tompor contributed to this report.