Here’s what tax experts say Black households should know before filing with IRS

EXCLUSIVE: As tax season officially kicks off on Jan. 24, tax professionals lay out important tips to keep in mind for filers, especially as it relates to 2021's child tax credits.

Experts are cautioning Black households from filing their own taxes in 2022. They predict 2021 filings will yield historic tax returns, but worry self-filing software miss tax credits and deductions incurred during the pandemic or programs newly established by the federal government. 

Tax form and mobile phone with e-filing apps. (Photo: Adobe Stock)

Shonda Love launched a national online directory for Black tax and accounting professionals in 2021 after witnessing record tax returns filed on behalf of her clients. Love believes there are many factors that make this year’s filing season unique and will result in additional boosted return checks. 

“As a skilled and trained tax professional, it’s our job and our duty to our clients to probe and ask questions to find out what credits they’re available for,” Love told theGrio

Love believes the personalized touch of a certified tax professional is essential to taking advantage of credits from the previous fiscal year that have rolled over. One such credit to see an extension into this tax season is the Advanced Child Tax Credit, which was established through the American Rescue Plan, the pandemic stimulus signed into law by President Joe Biden in March 2021.

U.S. President Joe Biden participates in a bill signing as Vice President Kamala Harris looks on in the Oval Office of the White House on March 11, 2021 in Washington, DC. (Photo by Doug Mills-Pool/Getty Images)

Although advance payments went out to eligible households in 2021, recipients can access an additional installment from the program when they file taxes for the 2021 fiscal year. 

“Half of [the child tax credit] was delivered in calendar year 2021 through advanced payments, and half of it will be delivered when people file their 2021 taxes basically now through April 15 into early 2022,” explained Kris Cox, deputy director of federal tax policy at the Center on Budget and Policy Priorities

While the child tax credit program is available to be claimed during this tax season, a continuation of the program is still pending on Capitol Hill as lawmakers remain in debate over the Build Back Better Act. The stall of BBB has caused outrage from many organizations that advocate for lower income families.

“The child tax credit cut childhood poverty in half,” Jade Magnus Ogunnaike, senior director of the media, culture, and economic justice at Color of Change underscored to theGrio

“We are really looking for Congress to take this seriously and put America’s children at the top of their priorities list, not corporate interests, not old tropes and stereotypes about welfare queens.” 

Ogunnaike’s reference to comments about welfare queens takes aim at one of the U.S. Senators who is a hold out on BBB — Democrat Joe Manchin of West Virginia. He has said he would consider supporting the tax credit if there was a work requirement attached as a condition.

Senate Energy and Natural Resources Committee Chairman Joe Manchin (D-WV) questions witnesses during a hearing about hydropower in the Dirksen Senate Office Building on Capitol Hill on January 11, 2022 in Washington, DC. (Photo by Chip Somodevilla/Getty Images)

One of the concerns experts have expressed about access to the first round of the child tax credit is filing taxes all together. Many households that qualified for the advance payments tend to be those that do not have an incentive to file tax returns. 

According to the IRS, Individuals who are under age 65, are required to file a tax return if their 2021 gross income was at least $12,550 as a single filer. Married couples who file jointly must submit a tax return if they have a gross income of $25,100 or more if both spouses are under age 65. If one spouse is under age 65 and one is 65 or older the bar is set at $26,800. 

Based on the poverty guidelines established by the Department of Health and Human Services (HHS), a single person household making $12,880 is at the poverty line, and a nuclear family of four reaches this point when their gross income is $26,500 or less. 

When people do not make enough gross income to be required to file taxes, they sometimes opt out of the process and miss key opportunities for funding they are entitled to. 

W-2 Wage and Tax Statement Form. (Photo: Adobe Stock)

Experts also point to a fear that receiving the child tax credit could alter a household’s eligibility for other public benefits programs. 

“There’s a need to make sure that people are clear again on their eligibility, and that they can still get the full child tax credit, even if they did not get advance payments in 2021,” Roxy Caines, earned income credit campaign director at Center on Budget and Policy Priorities.

For those who cannot afford to hire a CPA, these are many verified resources that experts recommend that will assist in filing a tax return this year.

“Across the country, there are places called volunteer income tax assistance sites,” Caines added.“And these sites use volunteers better trained to help people get their tax credits, they receive specific training on the Child Tax Credit, as well as other refundable tax credit.” 

Jessica A. Floyd is a Business and Finance Correspondent for theGrio whose reporting has been picked up by HuffPost, POLITICO, CNBC, Federal Times, EBONY and several other national news outlets. Jessica’s reporting for theGrio focuses on the intersection of race and national economic and labor issues.

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