Changes to Tax Credits Widens Eligibility for Residents

United Way is ready to help using its free tax prep program


Through its free tax preparation and filing services, United Way of Northern New Jersey and its partners are helping eligible residents navigate changes to federal and state tax credits. These changes will help more working families who are paying for child care or adult dependent care and those who are working hard but struggling to afford life’s basics.


“We want to make sure that those who are in most need don’t leave money on the table this year,” said United Way of Northern New Jersey CEO Kiran Handa Gaudioso. “Struggling New Jersey households have the potential to receive thousands of dollars in new tax credits — a vital lifeline.”


United Way and its partners — the IRS, Norwescap and Greater Providence Missionary Baptist Church — are offering free tax preparation and filing services at https://uwnnj.org/freetaxprep, a safe and secure online portal to help those who are living paycheck to paycheck. IRS tax-law certified volunteers ensure ALICE (Asset Limited, Income Constrained, Employed) and households in poverty receive all available tax credits.


To ensure all returns are filed by this year’s April 18 deadline, the online tax portal will close on April 9.


The following are changes that could help bring much-needed financial relief to struggling families for tax year 2021:


The Child and Dependent Care Tax Credit, a federal and state credit that assists working families with costs associated with the care of a child or dependent adult, has been expanded. The federal cap on eligible expenses is now $8,000 for one qualifying person and $16,000 for two or more qualifying individuals. And, depending on their income, taxpayers may be able to claim a credit of up to 50% of those expenses.


Eligibility for the New Jersey Child and Dependent Care Tax Credit now includes taxpayers earning up to $150,000, more than double than before. Caps on employment-related expenses paid by taxpayers for qualifying individuals have also been removed and the credit is refundable.


Changes to the federal Earned Income Tax Credit (EITC), a proven anti-poverty tool that boosts refunds, means more childless workers and couples are eligible. The maximum federal credit has nearly tripled for these taxpayers and is now available to both younger workers and senior citizens.


The New Jersey EITC will see qualified taxpayers benefit from the state’s 40% match of the federal credit. The state EITC has also lowered its minimum age eligibility to 18 and removed a maximum age cap.


Finally, changes to the Child Tax Credit means more families are eligible. The benefits stand to be significant with a maximum credit of $3,600 per child aged 5 or younger and $3,000 for children aged 6-17. To receive the full credit, families need to file a return this year even if they don’t typically need to file.


“We know that every dollar counts for hardworking ALICE families,” Gaudioso said. “In addition to helping residents benefit from any eligible tax credits, we also help them save the average $270 fee that paid tax preparers charge.”


By visiting https://uwnnj.org/freetaxprep, tax filers can access the easy-to-use online system, which features secure document uploads, encrypted email communication and video conferencing. Assistance and forms are available in both English and Spanish.


To learn about additional filing options or for questions about the online filing portal, email UnitedWayTaxPrep@UnitedWayNNJ.org or leave a message in English or Spanish at 973.993.1160, x5 and a tax specialist will return your call.


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