Head Start programs can work with families seeking assistance with tax preparation to find the Volunteer Income Tax Assistance (VITA) program that offers free tax preparation services in their community. Tax credits can lower the taxes paid by a family in a year and may result in a tax refund. Tax refunds may be used toward important FEM goals that families have.

Families may be eligible for the following credits when filing their federal income tax returns each year:

• Child Tax Credit (CTC) is a credit for working parents who earn low incomes. The credit is generally meant to offset the burden of child-related expenses and is based on the number of children in a family.
• Child and Dependent Care Credit (CDCC) is a credit that may help families pay for the care of eligible children and other dependents.
• Earned Income Tax Credit (EITC) provides support to working people with low to moderate incomes by offering tax credits based on the income they earn in a year. The credit represents a percentage of earnings, from the first dollar of earnings until the credit reaches its maximum.
• American Opportunity Tax Credit (AOTC) is a credit for qualified education expenses paid for an eligible student for the first four years of higher education.
• Lifetime Learning Credit (LLC) is a credit for qualified tuition and expenses for students improving job skills by taking undergraduate, graduate, and professional courses.
• Saver’s Credit provides a credit for families who make contributions to a qualified retirement plan and meet income limits.

Notes

The definitions above come from the Internal Revenue Service. None of the information in this Toolkit is intended to be tax advice. Please speak to a licensed professional about any tax-related questions. Each family’s tax situation is unique and not all families will qualify for tax credits and services.

While a Social Security Number (SSN) is not required to file taxes or receive some tax credits, the tax filing process has distinct rules for those filing with Individual Taxpayer Identification Numbers (ITINs) instead of SSNs. Learn more about filing taxes with an ITIN.

Ideas for Action

1. Find free tax preparation services in their community.

Many Head Start families and staff are eligible for free tax preparation services through the Internal Revenue Services’ Volunteer Income Tax Assistance (VITA) program. Staff can help families locate a VITA site near them.

Start the Conversation

• "I know tax time can be extremely stressful and confusing. Are you aware of the VITA free tax preparation sites? Would that be something you’re interested in learning more about?”

• Find a Location for Free Tax Help (interactive tool)

2. Learn about tax credits they may be eligible for.

Staff can help families learn about and access the range of tax credits they are eligible for. You can help them claim money they are owed by increasing their awareness of these credits. Encourage families to explore these credits further with a qualified tax preparer at a VITA site.

Start the Conversation

• "What do you know about tax credits now?”
• "What is the outcome you’d hope for from filling your taxes?”

• See list of tax credits above

3. Gather important tax documents.

Staff can encourage families to save documents and information that may be important for filing taxes. In addition to official tax forms, families should keep track of child care expenses, higher education expenses, contributions to charity, and self-employment income and expenses.

Start the Conversation

• "What do you need to be prepared for filing your taxes?”
• “What challenges do you anticipate this year preparing your taxes?”

• What to Bring to a Tax Appointment (checklist)

4. File taxes yearly.

Filing taxes can seem intimidating, but it can be extremely beneficial to file taxes every year. Many low-income families receive tax refunds, even if they are not required to file a tax return.

Start the Conversation

• "Where are you right now with your taxes?”
• “What is holding you back and how can I support you with it?”

5. Consider how to use their tax refund.

Staff can use tax time as an opportunity to connect with families about their financial goals for the year. Staff can have conversations with families about how they plan to use any tax refund they may receive.

Start the Conversation

• "It’s great to hear you were able to file your tax return last week! Would you like to talk through how the refund money could support some of the goals you have?”
• “What is exciting to you about getting your tax refund?”

• Saving at Tax Time (worksheet)
• Make the Most of Your Tax Refund (video)

Partner

Spread the word about EITC!

Programs can participate in the yearly EITC awareness campaign, spreading the word about the Earned Income Tax Credit to families. The IRS provides a partner toolkit to make it easy to share information about the EITC in your program and community.

Learn More with These Resources

• Credits and Deductions for Individuals (resource collection)
• EITC and Other Refundable Tax Credits (resource collection)
• Get It Back Campaign (resource collection)

Last Updated: November 16, 2023