WHAT EVERYONE SHOULD KNOW ABOUT TAX CREDITS

The New York State Child Care Coordinating Council
and the National Women’s Law Center Launch a Tax
Credit Outreach Campaign to Encourage Families to
Take Advantage of Tax Benefits

Federal tax credits can bring thousands of dollars in tax benefits to low and moderate-income families in your communities. The paragraphs below explain how much each of these credits can be worth to families. The credit values listed below are for the credits families claim when they file their 2004 tax returns in early 2005, based on the income they’ve earned and the expenses they incurred during the 2004 calendar year. In some cases, these credits are refundable, meaning that even if a family does not earn enough to owe income taxes, the family may be able to collect a refund check from the government!

The federal Child and Dependent Care Credit is designed to offset some of the child and dependent care costs that families pay in order to work. This credit is worth up to $2,100.

The federal Child Tax Credit is designed to help families offset some of the costs of raising children. This credit is worth up to $1,000 per child. Even families who owe little or no income tax can receive at least some of this credit as a refund if they have at least $10,750 in earnings.

The federal Earned Income Tax Credit is designed to boost the wages of eligible families (married couples earning less than $35,458 or singles earning less than $34,458). It is worth up to $4,300 and is available as a refund for families that owe little or no income tax.

Similar state tax credits can provide more tax savings for families, especially when those state tax credits are refundable. Twenty-six states and the District of Columbia have child and dependent care tax provisions (some that are credits and some that are deductions) and 17 states and the District of Columbia have state earned income tax credits that are based on the federal Earned Income Tax Credit.

The combination of federal and state tax credits can be extremely valuable to families. In New York, for example, families can receive up to $2,100 from the federal Child and Dependent Care Credit, $2,310 from the New York Child and Dependent Care Credit, $4,300 from the federal Earned Income Tax Credit, $1,290 from the New York Earned Income Tax Credit, and $1,000 per child from the federal Child Tax Credit.

For more information about the Tax Credits Outreach Campaign contact the New York State Child Care Coordinating Council at (518) 690-4217 or e-mail or for more information on the federal and state child care credits, visit the National Women’s Law Center at www.nwlc.org. Specific information about whether or not an individual qualifies for a tax credit may be obtained by contacting the IRS (federal tax credit information) at 1-800 829-1040 or the NYS Tax Line (state tax information) at 1-800-225-5829. For free tax preparation, call AARP Tax-Aide at 1-877-221-7844. New York City residents call 311 for more information.
230 Washington Avenue Extension Albany, NY 12203 ph. 518-690-4217 fax 518-690-2887