The Importance of Filing Taxes

We all know that tax time can be particularly stressful for everyone. This legal requirement can be anxiety provoking, even though you know that there might be some cash waiting for you as a reward. So why file even if you make below the income threshold and aren’t legally required to?

Taxes are more than just a legal obligation, they are an opportunity for you and your family. Tax credits like the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) help make your tax refund bigger- putting cash directly into your family’s pocket. By not filing you are throwing away thousands of dollars that belong to you. This money is not a loan, and is based off of your family size and income. Most importantly, these tax credits are only available to those who file their taxes.  

United Way has partnered with the IRS to make the tax filing process easier. United Way and our partners are here to help and serve you. As the cost of living continues to rise, we know that having extra cash in your pocket can help you breathe a sigh of relief- even if it’s just for a moment.

Clients like Lilly in Bakersfield have used their refund on essentials like WiFi, car maintenance and college courses for her son. These tax credits provide income that could help her fix the car she uses to drive to work, buy the clothes her daughter wears to school, and improve her daughter’s chances of going to college.

“I have a Child taking his high school and early college courses online, I plan on (using my refund) to pay for his next set of books for his next choice of early college classes and will be updating our Wi-Fi services.  It will also help aid us in knew attire and maintenance of transportation and hygiene expenses. We are a household of 3 and all have sensitive skin which can be for the most costly,” said Lilly. 

Who do Tax Credits Help?

Tax credits help working families the most, particularly caregivers with children, women with children, women and children of color, Black people, Latinos and farmworkers. For example, if a Black mother earns about $15,000 a year- she receives a total amount of $4,930 just from the EITC and Child Tax Credit. 

Undocumented caregivers who have children with social security numbers, can receive certain tax credits and it will not affect immigration status. If you have an ITIN, you can receive the CalEITC tax credit. The EITC is a working person’s tax credit and benefits women of color with families at high rates. 

Why We Fight for Tax Credit Expansion

United Ways of California knows that tax credits help communities by putting thousands of dollars back into the pockets of hard working families. This money is more than just a one time refund. It’s money for gas, groceries, bills and rent. And an opportunity at improved health outcomes.

Tax credits like the Earned Income Tax Credit have been proven to positive affect health outcomes in communities.  According to the CDC Foundation, the Earned Income Tax Credit is associated with several positive health outcomes including:

• Reduction in infant mortality and preterm labor
• Improvements in birthweight and maternal health
• Indirectly helps increase test scores in school
• Improves graduation rates and college enrollment

United Ways California continues to work tirelessly to expand tax credits- helping make the dollar amount larger and accessible to more people.