Detroit leaders urge residents to seek tax credits for larger refund

Detroit — Mayor Mike Duggan and a coalition of community organizations on Monday kicked off an annual outreach campaign to aid Detroiters in getting larger tax refunds. 

Organizers said they are working to educate residents on the federal Child Tax Credit and Earned Income Tax Credit, two credits that Duggan stressed they can claim this year. Many residents, he added, can get help with filing returns for free. 

Last year, families received monthly payments of up to $300 per child through the expanded child tax credit.  Families are eligible for an additional lump sum of up to $1,800 per child when they file their taxes in 2022, plus any of the monthly payments they may have missed.

Duggan outlined efforts to encourage families to file their claims during a press conference at Detroit Public Safety Headquarters alongside leaders from Accounting Aid Society, United Way for Southeastern Michigan, Wayne Metropolitan Community Action Agency, University of Michigan’s Poverty Solutions and Community Development Advocates of Detroit.

In many cases, low-income families, who make $57,000 a year or less, could receive both tax credits in an amount that exceeds taxes owed, Duggan said.

“The City of Detroit and its partners are going to make sure every Detroiter has the help and information they need to claim these funds,” Duggan said. “The expanded Child Tax Credit is a once-in-a-lifetime opportunity, and the impact can be life-changing for many families. But you can’t take part in this benefit if you don’t file your taxes, so we’re going to help if you need it.”

About 83% of Detroiters who are estimated to be eligible for the Child Tax Credit have already received payments from last year or will see it soon, said Luke Shaefer, director of UM’s Poverty Solutions initiative.

"In the first half of the Child Tax Credit program, we saw over $100 million flow into the pockets of Detroit families,” said Shaefer, also a professor of social justice and social policy. "Families that got the Child Tax Credit were significantly more likely to say their financial situation is better today than it was a year ago."

In most cases, residents can file taxes for free in Detroit with the help of hundreds of staff and volunteers from Accounting Aid Society and Wayne Metro who will assist with tax preparation in person, virtually, and at “drop & go” locations. The effort is funded through partners at the Skillman Foundation, Kresge Foundation, Ballmer Group, and W.K Kellogg Foundation.

The city started the annual "Claim Your Refund" campaign in 2017 after finding that Detroiters were leaving an estimated $80 million of potential tax refunds unclaimed each year. 

Since then, Detroiters have claimed $56 million more in EITC refunds each year on average. Last year, 90,000 residents claimed a total of $130 million in EITC, Duggan said.

"In many cases, this credit is doubling the monthly income for families in need," said Priscilla Perkins, president and CEO of Accounting Aid Society. 

Households with children under 18 are eligible for monthly cash payments under the federal Child Tax Credit, which began in July 2021. But residents must file taxes in 2022 to receive the second half of the credit.

Families who received a Child Tax Credit payment last year should look out for a letter from the IRS detailing how much they received. The letter is needed to file 2022 taxes and ensure families get the maximum allowed payment. Not supplying the letter with tax filings could lead to 2022 payments being withheld.

It's not too late to claim the Child Tax Credit if residents did not receive monthly assistance last year. Residents may be eligible even if they are not the child's biological parent but must claim them in their filings.

The amount of the refund depends on income, filing status, and the number of qualifying children claimed on tax returns. 

A single individual with no children who works and makes less than $21,430 could get back as much as $1,502. A married couple with three or more children who file a joint return, with a combined income of less than $57,414, could receive the maximum EITC of $6,728.

"The vast majority of families are eligible for one or both of these," Shaefer said.

Residents can make an appointment by calling 2-1-1 or visiting online at GetTheTaxFacts.org.

To file online, use United Way's My Free Taxes guide at UnitedWaySEM.org/taxes. There is also Spanish and Arabic options available and a helpline at (866) 698-9436 available from 10 a.m. to 10 p.m. daily.

srahal@detroitnews.com

Twitter: @SarahRahal_