The American Opportunity Tax Credit is worth $2,500 and can be used for tuition and course materials needed to pursue an undergraduate degree. Up to $1,000 of this credit can be claimed even if no income tax is owed.
Working with schools offers many opportunities to reach families that may qualify for the tax credits. Schools are usually viewed as trustworthy institutions and families pay attention to information children bring home from school. School administrators are often willing to help with tax credit outreach efforts since they know that a secure home environment promotes school achievement. Many have recognized the value of the EIC and the CTC in contributing to family stability.
- Ask school officials to share tax credit information with families who are likely to qualify. Focus on schools in which many students are eligible for free or reduced-price meals, or Title I schools, which serve elementary school children in lower-income communities. Your state Department of Education can tell you which school districts have these programs. Enlist school superintendents or individual principals to distribute information along with notices of eligibility for school meals or with other materials such as school newsletters, report cards and lunch menus.
- Recommend that your state PTA provide information on the EIC and the CTC to all local PTA presidents and encourage them to share the information with families through mailings and community assemblies. Offer to arrange for a speaker to talk about tax credits for working families at an upcoming PTA meeting.
- Make sure school counselors know about the EIC and the CTC and where families can get free tax assistance. These school employees frequently come into contact with families in financial crisis.
- Ask administrators to provide tax credit information to General Education Diploma (GED) classes and to send information with GED certificates.
- Engage community colleges and technical schools in outreach. Students who have returned to school to improve their job skills and are working part-time or at lower wages may be eligible for the EIC and the CTC. Others who are taking non-credit courses to learn about personal finance issues, such as homeownership, also may be eligible.
- Involve students in conducting outreach in the community. Many schools have incorporated community service activities into the curriculum. Students can help publicize the EIC and the CTC and assist at VITA sites. Fraternities and sororities, as well as other student associations, can take on tax credit outreach projects.
- Partner with high schools to provide free tax filing assistance. High school VITA sites deliver a needed service, especially in under-served communities. Contact the principal, superintendent or administrator of a local high school to discuss how a VITA site can benefit your community. For strategies to organize a high school VITA site, see “High Schools: A Resource for Free Tax Preparation”.
Tax Credit Outreach IN ACTION
Human Resources Agency (HRA) of New Britain, Connecticut, helps lower-income workers and families achieve economic self-sufficiency through its Foundation for Financial Independence Program. During the tax season, HRA partners with New Britain High School’s (NBHS) Academy of Business and Finance department to provide the community an on-campus, student-run VITA site, financial education workshops, debt and credit counseling, and an Individual Development Accounts program.
Since 2009, HRA has had over 80 student volunteers from two high schools participate in its VITA Youth Program, most of whom have become IRS-certified VITA return preparers through its business class partnership with NBHS. Students who enrolled in business classes were eligible to receive academic credit for their volunteer work while simultaneously fulfilling their community service graduation requirement.
In 2013, student volunteers set up an information table during lunch periods to answer VITA-related questions. In the classroom, students created flyers for HRA’s on-campus VITA site and drafted morning loudspeaker announcements to promote free tax help for working students. In addition, HRA enlisted NBHS’ principal to inform school employees, students, and parents about free tax help using a district-wide email system that reached families attending all schools within the community twice throughout the year.
During the 2013 tax season, student volunteers prepared 62 tax returns, while HRA completed 2,571 tax returns. This effort generated $4.8 million in refunds for the New Britain community.
Contact: Marlo Greponne, HRA, (860) 612-3983, firstname.lastname@example.org
Glad You Asked That!
Q: Can a working family claim a child for the EIC if she is a college student living at school?
A: Full-time students up to 24 years of age can be qualifying children for the EIC. If the student lives away from home to attend school, it is considered a “temporary absence” and the student still can count as a qualifying child.
Q: If a student gets financial aid, can his family still get the EIC or the CTC?
A: Non-taxable scholarships and grants are not considered income in determining eligibility for the EIC and the CTC; taxable grants and scholarships also are not considered “earned income,” but are included in determining “adjusted gross income,” which may affect eligibility for the EIC and the CTC. Check with the IRS at 1-800-829-1040 to find out which scholarships and grants are taxable or non-taxable.
Q: If a family gets the tax credits, will it mean the student won’t qualify for financial aid?
A: EIC and CTC refunds are not counted as family income in determining financial aid eligibility.