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  • Consumer alert: Parents, you could get $8,000 for child care when you file your 2021 taxes. Here’s how.

Consumer alert: Parents, you could get $8,000 for child care when you file your 2021 taxes. Here’s how.

By on March 24, 2022 0

Parents in Rochester pay an average of $8,545 per year for preschool child care. Add another $800 if your child is under two. Consider the fact that in Rochester, the median monthly income is $2,996. Now consider the fact that these families pay more than $712 on average per month for child care. This represents about a quarter of their monthly income.

In recent years, the maximum child care tax credit has been $1,050 for one child. Now it’s $4,000 for one child, $8,000 for two or more.

I spoke with the leaders of Say yes Buffaloa non-profit organization that provides production assistance for low-income families.

“In the first three weeks of our program, we served 247 families and those families received over $1 million in reimbursements,” said Aaron Lowinger, communications and graphics manager for Say Yes Buffalo. “Poverty is a huge problem for families in Rochester, Buffalo, Syracuse and any funds that go straight into people’s pockets will make the most difference.”

So I did the math. This free tax assistance program has helped low-income families get refunds of about $3,650 each on average. And that’s largely due to some family-friendly tax changes this year.

Here is an overview of other expanded tax credits you should know about.

  • The 2021 child tax credit has increased to $3,000 for children 6 to 17 and $3,600 for children 5 and under. It was $2,000 before. If you received child credit advance payments last year, you’ll get the other half of your credit when you file.
  • We received two stimulus payments in 2021. If you haven’t received your money, you can request a recovery rebate credit.
  • The earned income tax credit for people without children has almost tripled from $538 to $1,502, and you can now claim this deduction if you are only 19 years old. Previously, the threshold was 25 years.
  • Even if you claim the standard deduction, like most filers, couples can now deduct up to $600 for charitable contributions, $300 for single filers.

In short, even though you usually don’t have to file tax returns, the IRS says you should this year. For example, the earned income tax credit for low-income filers has been extended, giving you a lot more money than before.

So, while you’re gathering information for your tax preparer or squinting through Turbo Tax forms on your computer, think about the money ahead of you, and maybe we can all treat Tax Day like your birthday. Consider it a gift from your favorite uncle named Sam.