Navigating the tax system can be confusing, but many federal and New York State tax credits are designed to help low- and moderate-income families and individuals. These credits can reduce your tax bill, and some are even refundable, meaning you can receive a payment even if you don't owe any taxes. The Monticello Housing Authority wants to help you understand and claim the credits you're eligible for.
These are some of the most common and beneficial tax credits available to low-income residents in Monticello.
The EITC is a significant refundable credit for working individuals and families with low to moderate income. It can provide a substantial refund, and the amount you receive depends on your income, marital status, and the number of children you have. Both the federal government and New York State offer this credit.
Federal EITC: The amount varies, with higher credits for families with children. You must have earned income, a valid Social Security number, and meet certain income and residency requirements.
New York State EIC: This credit is typically a percentage of your federal EITC, providing an additional benefit.
If you have children, you may qualify for multiple credits to help with the costs of raising a family.
Child Tax Credit (CTC): A federal credit that helps families with the costs of raising qualifying children under age 17. A portion of the credit is refundable.
Empire State Child Credit: This is New York State's version of the CTC, available to residents with children at least four years old who qualify for the federal credit.
Child and Dependent Care Tax Credit: This credit helps offset the costs of care for a qualifying child or other dependent so you can work or look for work.
New York State offers tax credits for both homeowners and renters to help with property tax costs.
Real Property Tax Credit (NYS): A refundable credit for homeowners or renters with a household gross income of $18,000 or less who pay property taxes or rent. To claim it, you'll need to fill out Form IT-214 and attach it to your NYS income tax return.
School Tax Relief (STAR) Program: A property tax exemption for homeowners that lowers your school property taxes. The benefit is typically applied as a credit that reduces your school tax bill.
Don't pay for tax preparation! There are free services available to help you file your taxes and claim all the credits you're entitled to. These services are staffed by IRS-certified volunteers.
Volunteer Income Tax Assistance (VITA): This program offers free tax help to people who generally make $64,000 or less, persons with disabilities, and limited English-speaking taxpayers.
AARP Foundation Tax-Aide: Provides free tax preparation for people 50 and older who have low to moderate income.
You can find local VITA or AARP Tax-Aide sites by using the IRS VITA locator tool.
File Your Returns: You must file both a federal and a New York State income tax return to claim these credits, even if your income is too low to require a filing.
Keep Good Records: Have all your necessary documents ready, including W-2s, 1099s, and any other income statements. This will make the process much smoother.
Watch Out for Scams: Be cautious of anyone charging for services that are available for free. The IRS and official tax programs will not contact you by email, text, or social media asking for personal information.
Check Eligibility: Eligibility requirements can change, so always check the current income limits and rules for each tax credit.
