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Helping Families Get Billions in Child-Related Tax Credits

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San Fransisco

This year, there are significant increases in federal and state tax credits that can put thousands of dollars in the pockets of California families.

That’s why the California Child Care Resource & Referral Network, in partnership with the National Women’s Law Center, is spreading the word that working parents may be eligible to lower their taxes or increase their refunds because of these credits.

“Hundreds of thousands of parents come to child care resource and referral agencies throughout California each year, many who don’t know they’re eligible for thousands of dollars in tax credits. We are thrilled at the opportunity to let parents know that these tax credits are available, have increased in value over the past year, and are actually pretty easy to claim,” said Patty Siegel, Executive Director of the California Child Care Resource & Referral Network.

An estimated $353 million in Earned Income Tax Credits went unclaimed by eligible families last year. These are the same families being squeezed between increases in cost of living and proposed decreases in supportive health and social services from the state. Tax season actually may be welcomed this year. These families need these tax credits now more than ever.

“It’s difficult to make ends meet these days, especially for working families with children. Many families don’t know that there have been significant increases in federal and state tax credits that can mean thousands of dollars to help them meet their child care and other expenses, ” said Nancy Duff Campbell, Co-President of the National Women’s Law Center.

As a result of the federal increases, families may be eligible for:

• The federal Child and Dependent Care Credit, designed to offset some of the child or dependent care costs that families incur in order to work. The maximum value of the credit has increased to $2,100 this year from $1,440 in 2002. This is the first increase in the value of this credit in over 20 years.

• The federal Child Tax Credit, designed to help families offset some of the costs of raising children. This credit has increased from $600 per child in 2002 to $1,000 per child this year.

• The federal Earned Income Tax Credit, which helps provide a wage supplement for low-income families (those earning less than $34,692 annually). The maximum credit has increased from $4,140 in 2002 to $4,204 this year.

In addition, the value of the child care credit in California has also increased. The California Child and Dependent Care Expenses Credit will increase from a maximum of $907 in 2002 to a maximum of $1,050 in 2003.

The California Child Care Resource & Referral Network and its member agencies will distribute user-friendly materials in English and Spanish throughout the state. Child care teachers, parents and others in the community will receive fliers, phone calls and announcements throughout the tax season.

The Spanish materials will be especially important because the IRS has not translated many key documents into Spanish – including Form 1040 and its instructions – making it hard for the almost 14 million Spanish speakers with limited-English proficiency to claim the tax credits to which they are entitled. In addition, free tax help is available at local Volunteer Income Tax Assistance (VITA) sites. The locations of local VITA sites can be found at www.ftb.ca.govor by calling 1-800-852-5711.

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