Valuable Tax Credits for Hospitality Workers
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Get the word out to employees and customers who could benefit from the Earned Income and the Child Tax credits, which reduce the amount of income tax workers owe. Workers who don't make enough money to owe taxes can still qualify for the credit, but they must file tax returns to claim the credits.
Earned Income Credit
The EIC is a refundable, federal income tax credit for full- and part-time workers who fall below certain income thresholds. Employers must notify employees for whom income tax was not withheld at any time during the year and are encouraged to notify employees whose wages for 2015 were less than $53,267 that he or she may be eligible. The EIC can be worth as much $6,242. Singles who raised children and earned less than $47,747, or those who are married filing jointly, raised children and earned less than $53,267, in 2015 can claim the credit, as well as singles not raising children who earned less than $14,820 last year or, for those who are married filing jointly, $20,330.
Some workers with children choose to receive part of their EIC payments in advance as part of their regular paychecks and the rest after they file their annual tax returns. Individual taxpayers who earned less than $39,131, or those married filing jointly who earned less than $44,651, with at least one qualifying child are eligible.
Child Tax Credit
The Child Tax Credit is worth up to $1,000 for each qualifying child under 17. The tax credits can help employees pay for childcare and cover other day-to-day needs. Families who earned at least $3,000 in taxable income in 2015 are eligible.
Employer assistance
The Center for Budget and Policy Priorities offers free posters, fliers and paycheck inserts for employers. Color posters are available in English and Spanish, and fliers are available in 21 languages. Get more information at 202-408-1080. Download thematerials, and get tips to promote the tax credits.
The Internal Revenue Service also offers an employer toolkit with outreach tips, posters, payroll stuffers, and social media tools.
Free tax help
The IRS offers free electronic filing and assistance through the Volunteer Income Tax Assistance Program, a partnership with community-based organizations. Workers who earned less than $54,000 in 2015 are eligible, as well as people with limited English-language skills, people with disabilities and the elderly. Taxpayers can call 800-906-9887 to find a VITA site near them. The IRS helpline at 800-829-1040 is set up to answer taxpayer calls about credits or other tax issues.