The car couldnt have broken down at a worse time, Diane muttered. Her familys finances were pushed to the limit just paying for groceries, rent, transportation to work and child care for her three sonsall on only $10,000 a year. Now the transmission dies and the exhaust needs replacingright after Ive already gone over my budget to get the boys some much-needed clothes.
Diane was in luck, however. Shed learned about the Earned Income Credit and Child and Dependent Care Credit at the child care centers workshops. She got $1,750 back from the IRS, enough to fix the car and have some left over to pay other debts. And she decided to ask her employer to give her the earned income credit in advance with each paycheck so shed have some extra money throughout the year.
Its difficult making ends meet these days, especially for working families with children. Thats not news, but this is: By simply filing a federal tax return, families may be eligible to claim hundreds of dollars in child-related credits, says Ingrid Mooney, child care referral specialist at the Family Care Resources Program.
This year, working families with children and incomes up to $23,050 during 1993 may be eligible for an earned income credit consisting of:
In addition, individuals eligible for the earned income credit neednt wait until they file a tax return to take advantage of the benefits. They can receive part of the credit in advance with their paycheck during the year.
This is especially important beginning in January 1994, Mooney notes, because the credit has been expanded significantly.
Mooney says families of all income levels are eligible for the child and dependent care credit, to offset a percentage of their work-related child care expenses.
The maximum credit is $1,440 for families earning less than $10,000 who have child care expenses for two or more children under age 13.
Families who earn more than $10,000 and who have child care expenses for only one child or child care expenses of less than $2,400 per child receive less assistance.
Together these credits can spell relief for many families caught in a financial bind, Mooney notes.
Because many parents are not aware that help is available, the Family Care Resources Program and the National Womens Law Center are combining efforts in the Child Care Tax Credits Outreach Campaign, to help working families with children take advantage of the billions of dollars available to them.
Information about the campaign and relevant tax forms are available from the Family Care Resources Program, 998-6133. Free tax help is available toll-free at 1-800-TAX-1040. Individuals are urged to contact their tax accountant for detailed tax advice.