ABCD offers FREE tax return preparation for eligible residents who earned under $57,000 in 2020

February 11, 2021

ABCD offers FREE tax return preparation for eligible residents who earned under $57,000 in 2020

COVID-related Tax Relief Act of 2020 allows for use of 2020 OR 2019 income for EITC and the Additional Child Tax Credit; Eligible filers can claim Recovery Rebate Credit

(BOSTON, MA) – ABCD (Action for Boston Community Development) urges local Boston, Everett, Malden, and Medford residents to make an appointment for FREE tax preparation services.

All interactions will be remote: IRS-certified tax preparers will work with clients by phone, email, and online.

With the near economic collapse caused by the pandemic, a new Earned Income Tax Credit (EITC) rule under the COVID-related Tax Relief Act of 2020 can help people impacted by a job loss or change in income in 2020: Taxpayers can elect to use their 2019 earned income if their 2019 earned income is more than their 2020 earned income. The same is true for the Additional Child Tax Credit.

In addition, this year, taxpayers who were eligible to receive Economic Impact Payments but did not receive the full amount can claim the Recovery Rebate Credit against their 2020 income tax. Generally speaking, the credit will increase the amount of the filer’s tax refund or decrease the amount of tax owed.

Last year, ABCD helped 3,117 residents complete their state and federal tax returns, maximizing EITC, child tax credits, Senior Circuit Breaker and more, and resulting in $7.9 million in refunds . That economic infusion channels dollars back to hardworking families and revitalizes businesses inunder-resourced neighborhoods.

“The fallout of the COVID-19 pandemic has thrown vulnerable individuals and families into full-on crisis. They were already struggling, working to overcome stubborn systemic barriers and the constant strain of poverty. The coronavirus has ravaged their health and ruined their livelihoods. This free tax preparation service can mean the difference between paying their rent and being at risk of losing their homes; it can help not only with immediate expenses like food and medication and utility bills, but also help families find financial footing,” said ABCD President/CEO John J. Drew.

“A married couple with three or more children earning up to $56,844 and filing jointly will receive the maximum federal EITC of $6,660 plus the state EITC of $1,998 for a total EITC of $8,658. That can have considerable impact on a family that’s scraping by,” said Drew.

ABCD and a host of other community partners and volunteers help make up Mayor Martin J. Walsh’s Boston Tax Help Coalition. ABCD, which played a role in founding the coalition in 2001, also serves as a critical Massachusetts component of the Internal Revenue Service Volunteer Income Tax Assistance (VITA) program. In the last 30 years, ABCD has provided more than 150,000 people with free tax help preparation across the city.

ABCD recruits IRS-certified volunteers who receive special training and are supervised by experienced ABCD executive staff. Along with helping others, volunteers gain skills useful in future employment.

Drew noted that the EITC has been called one of the most successful antipoverty programs ever. It was established to assist income-eligible taxpayers who come from traditionally hard-to-reach and underserved communities. Wages have been virtually stagnant since the 1970s, meaning it’s harder than ever for working people to meet their basic needs.

The EITC can be accessed retroactively for the previous three years, so eligible taxpayers may qualify for a sizeable sum. “We’ve worked with people buried under a mountain of debt, folks who were out of options – and they had no idea they qualified for EITC until they came to see us. These tax refunds can help families avert disaster,” said Drew.

He added that those who don’t file for the EITC credit won’t get it – and the IRS estimates one out of five eligible taxpayers will not claim EITC and will lose out on this important credit. ABCD’s IRS-certified tax preparers ensure that eligible taxpayers follow through. That, along with other tax credits that are often overlooked – like Child Tax Credits and the Senior Circuit Breaker credit – can go a long way in paying for groceries, heat, and rent. The refunds might enable taxpayers to pay off debt and start saving money.

Earned Income and Adjusted Gross Income (AGI) must each be less than:
$50,594 ( $56,844 married filing jointly) with three or more qualifying children to receive a maximum Earned Income Tax Credit of $6,600;
$47,440 ( $53,330 married filing jointly) with two qualifying children to receive a maximum Earned Income Tax Credit of $5,920;
$41,756 ( $47,646 married filing jointly) with one qualifying child to receive a maximum Earned Income Tax Credit of $3,584;
$21,710 ( $15,820 married filing jointly) with no qualifying children to receive a maximum Earned Income Tax Credit of $538.

The child tax credit is a nonrefundable credit that allows taxpayers to claim a tax credit of up to $2,000 per qualifying child, which reduces their tax liability.

CIRCUIT BREAKER – Seniors may qualify for additional dollars.
Seniors aged 65 and older may be eligible to receive up to $1,150 in tax refunds from the Commonwealth of Massachusetts through the “Senior Circuit Breaker Tax Credit.” This credit is available to all eligible seniors who pay unsubsidized rent or property taxes and is retroactive for three years. The “Senior Circuit Breaker” offers a tremendous financial opportunity for those who qualify. It is important to note that seniors must file a tax return in order to receive the Senior Circuit Breaker credit even if they do not owe taxes.

Massachusetts residents must show proof of health insurance
As there is no Federal Mandate, if a taxpayer received insurance through the marketplace at any time during 2020 they will have to file form 1095A to consolidate their premium tax credits.

Massachusetts residents must show proof of health insurance coverage when filing their taxes. ABCD tax preparers can answer questions about the Premium Tax Credit and qualified exemptions (on the state side) for those who may owe for being uninsured and/or underinsured.

ABCD is offering free tax prep services remotely, working with residents of Boston, Everett, Malden, and Medford by phone, email, and online. The organization encourages residents to schedule a telephone appointment right away. Tax season runs through April 15, 2021. Visit bostonabcd.org/tax-assistance to learn more.

ABCD is part of the statewide Massachusetts Tax and Asset Consortium which includes community and civic partners, Commonwealth of Massachusetts, City of Boston, Internal Revenue Service (IRS), Federal Reserve Bank of Boston and MassSaves/The Midas Collaborative.