At this time of year, one of the top questions on many early educators’ minds is: how can I get the biggest tax return as quickly as possible? Our advice is to first determine your eligibility for the Earned Income Tax Credit by visiting our EITC webpage, and second have your taxes prepared at a free tax preparation site. If you earn under $49,000 annually, than you are eligible to have your taxes prepared for you for free at one of the volunteer staffed, free tax preparation sites located throughout the state. To determine the nearest free tax prep site to you, go to this link sponsored by the state: http://masscashback.ehs.state.ma.us/. Many sites require an appointment made in advance, so be sure to call ahead first. In order to receive your refund as quickly as possible, make sure you bring a cancelled check from your checking account so the volunteer can help you to file electronically. This way you should receive your refund in only 7-10 business days. If you live or work in Boston, we recommend the free tax preparation services available at Morgan Memorial Goodwill Industries at 1010 Harrison Avenue. Call 617-541-1206 for an appointment on Monday or Wednesday 4-7:30pm beginning January 30th through April 11, 2012. What documents do you need to bring with you?
- Photo ID for you and your spouse.
- Social Security Cards or Individual Taxpayer ID Number (ITIN) for you, your spouse, and all children.
- A Copy of previous year tax return. If necessary, contact the IRS for a copy of last year’s return.
- The amount of economic stimulus payment received from the IRS last year (if any).
- A voided check or deposit slip for Direct Deposit (including Account & Bank Routing Number).
- Proof of Health Insurance (1099HC or health insurance card).
- All W-2 forms from each employer.
Other documentation that you should bring (if it applies to you) is:
- All 1099 forms (1099-INT, 1099-DIV, 1099-misc., etc.) showing interest and/or dividends as well as documentation showing the original purchase price of your sold assets.
- All 1098T forms (tuition payments) and student loan interest paid.
- If you were paid Social Security benefits, bring your SSA-1099.
- If you received a pension or annuity, bring your 1099R.
- All forms indicating federal income tax paid.
- If applicable, unemployment compensation statements.
- Total Child Care Expenses and Child care provider information (name, employer ID, SSN).
- Total rent paid in 2011 – landlord / rental agent’s name & address.
If itemizing deductions, bring all receipts or canceled checks for items such as medical expenses, taxes paid, mortgage interest paid, and charitable contributions.
It is tax season again and if you haven’t already, you will soon receive your W-2 form and be ready to file your taxes for 2011. If you are a working parent with low to moderate incomeyou may be eligible for a sizeable tax credit. For example, the Earned Income Tax Credit (EITC) this year for families with three or more dependent children is $5,751, depending on your filing status and income.
The following chart shows the three factors that determine eligibility: annual income, number of dependent children, and filing as single/head of household or married filing jointly. Find yourself in the first two columns and then see the amount of your credit in the final column.
The IRS has found that 25% of people eligible for the federal EITC fail to collect their credit. We began a campaign in the fall of 2010 to spread awareness among early educators of the existing state and federal earned income tax credits. Since the average annual salary in the field of early education in MA is $25,000, many early educators, especially those with dependent children, are eligible to receive the credit. We’ve given presentations and distributed flyers on the EITC to several thousand early educators in the past year. Our website includes an EITC webpage to help answer any questions regarding eligibility and how to collect the credit. See our web page for information. Our EITC outreach campaign is a complement to the bill we have before the Massachusetts State Legislature to establish a new 15% tax credit specifically for early educators.
Next week’s blog will highlight free tax preparation services as a means to getting the maximum tax return possible.
Two weeks ago, we discussed the hearing of our bill before the Joint Committee on Revenue. What happens next? For a bill to become a law, there are many steps involved. The next step for our bill is for the Joint Committee on Revenue to report on the bill; they have until March 21st to issue their report. There are a few possible results of the committee’s report: they can report the bill out of committee favorably, they can recommend that the bill should not be passed, they can assign the bill to another committee for further review, or they can recommend that the bill be studied further. BTWIC is working to urge the Joint Committee on Revenue to report favorably on the bill so that it will move out of committee and go to the House or Senate Ways and Means Committee. The legislative session lasts two years, at the end of which a bill must be re-filed if it has not been passed. During this cycle, a bill undergoes three readings in both the House and the Senate and is subject to debate and amendments during the second and third readings in each legislative branch. The final step once the legislature engrosses the bill is for the Governor to enact it into law. Many bills have filed more than once before they become laws. Throughout the legislative process, there are multiple opportunities for constituents to become involved and advocate for the bill to be passed. At the moment, those who are interested in helping us to pass the bill can send letters or emails, or make calls to members of the Joint Committee on Revenue asking them to vote favorably on H2992 / S1428, An Act Creating an Early Educator Earned Income Tax Credit. This will be particularly helpful if the writer is a constituent of a committee member. See this link for a list of the Joint Committee on Revenue members: http://malegislature.gov/committees/joint/j26, and go to http://wheredoivotema.com/bal/myelectioninfo.php to determine if one of your legislators is a committee member. Down the road, once the bill is voted out of committee and goes up for a vote in the House and Senate, we will be coordinating a more widespread campaign to enlist supporters to reach out to their legislators for a favorable vote. Through our blog and our monthly newsletter and website, we will keep you posted on the bill’s progress and how you can help us get it passed. We greatly appreciate your support and interest as we go through this process. Correction: In the recent blog post on 12-16-11, an incorrect affiliation was listed for one of the early educators who testified at our legislative hearing. The correct information is Melissa Freeman of the YWCA of Central MA, not the YMCA.
BTWIC would like to congratulate the MA Department of Early Education and Care on the receipt of $50 million from the federal government as one of nine state recipients of the Race to the Top—Early Learning Challenge (RTT) grant. Having worked closely over the past year and a half with DEEC to develop a career ladder for MA, which was featured in the application for RTT, we are particularly proud of our state’s successful bid.
In our 2010 report, Blueprint for Early Education Compensation Reform, the first of our four recommendations towards improving compensation for the field was the creation of a career ladder for our state’s early education workforce. Although MA had tried in the past to develop a ladder, as of 2010, our state had not yet joined the other 36 states with some form of career ladder for early educators. Acting as a volunteer consultant, BTWIC was able to help DEEC to revisit this complicated task which resulted in the successful creation of a ladder that the state Board of Early Education and Care adopted in May 2011. Throughout the construction of the career ladder, BTWIC and DEEC involved stakeholders from around the state representing each of the sectors in early education. The result is a comprehensive document that addresses the particular issues of center-based, family child care, and out-of-school care. You can view the career ladder on the DEEC website. In the summer and fall of 2011, BTWIC conducted research to create a pricing index for the career ladder which we presented to the Board of Early Education and Care’s Fiscal Committee in early December 2011. The index presents comparison salary data and serves as a starting point for determining what level of compensation could be attached to each level of the ladder. The Fiscal Committee is currently reviewing the document. The career ladder recommendation is the first Blueprint recommendation to be completed. While it remains to be seen how the state and the field of early education in MA will implement the ladder, it will undoubtedly move the field forward. The receipt of the Race to the Top funds is indicative of the big step forward that DEEC has brought to the field through adopting systems such as the career ladder.