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February 23, 2022 Practice Points

Five Tips for Helping Transition Aged Youth File Their Taxes and Build Economic Security

A quick explanation of tax credits available to youth 18 or older with experience in foster care and homelessness and how you can help those youth this tax season.

By Jenny Pokempner

As a result of pandemic legislation, there are temporary changes in the tax law that make filing taxes very advantageous for transition aged youth this year and provide an opportunity for them to receive funds, build financial capability skills and assets. In addition to funds available for all adults, including the Child Tax Credit (CTC) and Economic Impact Payments (EIPs), transition aged youth with experience in foster care and homelessness are eligible for the Earned Income Tax Credit (EITC) if they are age 18 or older and they worked last year. Here is a summary of the key funds that are available and the amount of money at stake: 

  • EITC: Young people ages 18 or older who are or have been in foster care or homeless are eligible for the EITC if they made any money from work last year. A non-parenting youth could be eligible for up to $1,502. For a working parent, the maximum EITC is $3,618 for one child, $5,980 for two children, and $6,728 for three or more children. 
  • CTC: Parenting young people can receive the CTC even if they did not make any income last year. A parent is eligible for up to $3,600 per child aged 0-5 and up to $3,000 for a child aged 6-17. 
  • EIPs: Young people may also be eligible for any of the EIPs, also referred to as stimulus checks, that they have not yet received. An individual could be eligible or up to $3200 if they are not parenting and more if they are. 

These funds can be critical to a young person and help meet immediate needs, secure housing, and be part of a plan for savings. However, young people must file their taxes to claim these funds. Filing taxes can be overwhelming and confusing, especially for those filing for the first time and who do not have much support. Your help will greatly increase the odds that young people will receive the funds they are eligible for and establish the routine of filing taxes. Below are five tips so that you can support young people file their taxes this year: 

  1. Spread the word about the benefit to transition aged youth of filing their taxes this year. Let young people know that funds are available for them. If you do not work directly with youth, you can share this information with youth serving professionals. You can find a youth friendly FAQ here. You can also find template emails to send to colleagues and to young people here.
  2. Connect youth with free assistance to file their taxes. Volunteer Income Tax Assistance (VITA) sites, which are programs that provide no cost tax preparation assistance, are your best bet for individualized assistance for young people. These sites may be available in person or virtually. You can help youth find their local VITA here. Free online assistance can be found at the Get Your Refund website, which was developed by Code for America and VITA Sites, here
  3. Help youth prepare to file their taxes. Whether they go to a VITA site or file online, young people will need to collect documents and information for filing. The Tax Prep Checklist for Transition-Age Youth from John Burton Advocates for Youth is an easy to use resource that will assist youth with gathering the necessary information and materials in preparation for their tax appointment. Remind young people that if they were in foster care at age 14 or older or are or have experienced homelessness that they should check question 27a. This question was added to the tax form to help identify transition aged youth who may be eligible for the EITC based on the temporary changes in the law. 
  4. Use the tax filing experience as an opportunity to support the development of economic capability skills and asset development. Most young adults learn best by doing. Receiving a tax refund provides an opportunity to support youth in developing money management skills with funds that are their own. Support youth in developing a budget, a saving plan, opening a savings account, and exploring opportunities for financial planning and development for their future. Many of the organizations that are serving as VITA sites provide these services. 
  5. Use the tax filing experience to address any challenges to economic capability. This is a good time to ensure that youth in foster care have received their annual credit report and assistance in addressing any problems that are uncovered in the report, that they have their vital documents and that they are screened for any public benefits, such as food stamps or Supplemental Security Income that they may be eligible for and that would assist in the transition to adulthood. While these actions are part of the transition planning requirement for youth in foster care, they often fall through the cracks. This is a great time to ensure that these legal requirements are met and that youth have support if they confront challenges.

For more detailed information on how to help youth file their taxes, check out these resources: 

Jenny Pokempner is the policy director at the Youth Law Center in San Francisco, California.

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