Filing taxes makes this time of year stressful and expensive, but it doesn’t have to be. Many Colorado families are eligible to receive a large refund with the help of refundable tax credits and free tax preparation services.
Year after year, too many Coloradans are not claiming the Earned Income Tax Credit (EITC) and other tax credits. In fact, Colorado has the second to lowest state participation rate of qualified households taking advantage of the EITC. In 2013, about 74% of eligible families received the EITC, with around 110,000 eligible families in Colorado missing out on this tax credit.
Low- and moderate-income families may be eligible for this tax credit depending on their income and household composition. The federal credit is worth up to $6,200 and Coloradans who qualify get an additional 10% from the state credit. For many Colorado families, this is the largest lump sum payment they receive all year.
Natasha, a single mother for two girls, recently received a $3,417 EITC refund. Like many other families receiving the EITC, Natasha is using her refund wisely. Natasha plans to use the refund to better her credit score. “Last year I was also able to pay off debts to better my credit score which allowed me to help my 16-year-old purchase her first car,” said Natasha. “When I am more financially secure my kids benefit. The refund helps me to get back on track every year and provide for my family.”
According to the Center on Budget and Policy Priorities, 377,000 households in Colorado received the EITC during 2014. On average, 148,000 Coloradans have been lifted out of poverty because of the EITC, including 82,000 children. For eligible families, the EITC refund allows working families to pay outstanding debts or begin saving, afford household items, and provide their growing children with clothes and school supplies. “Eligible families that miss out on this tax credit, simply because they do not know about it, may have fewer chances to get ahead and become financially secure,” says Courtney O’Reilly, Tax Help Colorado program manager. “Colorado has one of the lowest participation rates for the Earned Income Tax Credit. It is our goal to increase awareness and financial security in our communities.”
Tax Help Colorado hosts 25 free tax preparation sites across the state, introducing connecting more families to tax refunds. Families that earned $54,000 or less in 2016 are eligible for the tax help. Free online filing is also available for families who earned $64,000 or less.
Learn more about the Tax Help Colorado program and The Piton Foundation’s EITC Outreach campaign at www.piton.org/tax-help-colorado.
About The Piton Foundation
The Piton Foundation, which is part of Gary Community Investments, is a private, operating foundation established in 1976 by Denver oilman Sam Gary. It is committed to improving the lives of Colorado’s low-income children and their families by increasing access to quality early childhood and youth development opportunities and fostering healthy family and community environments. In addition to investing in creative solutions for Colorado’s low-income children and their families, Piton operates its own programs, including the Data Initiative, Tax Help Colorado, and the nation’s largest and longest-running Earned Income Tax Credit public information campaign.