By Abby Hoover
Liberty Tax at 3414 Independence Avenue has been home to your locally-owned Northeast tax professionals for nearly a decade.
Owner Thomas Henggeler, who grew up near Truman Road and attended St. Stephen’s Academy with his four siblings, is set on getting his clients the highest return legally possible.
“I want people to get that money to use it to cover their life expenses,” Henggeler said. “The Child Tax Credit is huge. Now, it’s a one time credit. Whenever they pass a tax law, they put an expiration date on it, and then Congress votes on whether or not to extend it. So this Child Tax Credit was created for one year and they were supposed to pass a bill in January but it never got passed.”
Due to the economic impact the pandemic has had on many American families, the Internal Revenue Service (IRS) has made some changes.
The Child Dependent Care Expenses Credit is now refundable, meaning up to 50% of what taxpayers paid for day care is refundable for one year only.
“From a tax perspective it is a huge deal,” Henggeler said.
Child Tax Credits are also available for people who had no earned income and people with Individual Taxpayer Identification Numbers (ITIN) as long as the children have a Social Security Number (SSN).
For tax year 2021, families claiming the Child Tax Credit will receive up to $3,000 per qualifying child between the ages of 6 and 17 at the end of 2021, up to $3,600 per qualifying child under age 6 at the end of 2021, and monthly “advance CTC” payments totaling 50% of 2021 expected CTC issued July through December.
“We had some refugees who moved from Democratic Republic of Congo where they spoke Swahili – because that’s what the translator spoke – and they’re new refugees so they get a lot of assistance when they come to the country,” Henggeler said. “And they have seven kids. So guess what $3,000 times seven is. It’s $21,000. So even though they didn’t have any income, because they have kids who have [SSN] or ITIN, the kids are entitled to this refundable credit.”
Henggeler wants people to remember that undocumented immigrants also pay taxes, just with an ITIN instead of a SSN.
“The people with ITINs normally don’t get any credits, refundable or otherwise,” Henggeler said. “However, the Child Tax Credit is refundable for them. So we had another couple who came in and they were getting a $30,000 refund. A family of five might receive a refund of $30,000 just claiming those credits. That’s pretty awesome!”
Henggeler also recalled a single mom on disability who had four or five kids. She didn’t work, so hadn’t been filing a tax return.
“She came this year and we were able to get the Child Tax Credit for all the kids,” Henggeler said. “This benefits everybody… It’s an effort by the IRS to help offset the economic hard times that people have gone through for the last two years; high income, low income, new refugees, undocumented immigrants.”
Henggeler said another issue tax preparers are facing this year is that people didn’t hang on to documentation of economic impact – or stimulus – payments.
“No one can remember how much free money they got from the government and it’s caused a lot of problems for us,” Henggeler said.
Year over year, unopened mailed in returns jumped from 17,508 to 1,102,781, and Error Resolution Returns jumped from 1,699,690 returns to 7,453,148.
“This is putting a lot of strain on tax practitioners, as well as the IRS,” said Henggeler, who owns four Liberty Tax offices across the metro. “So be kind, give your tax people a little slack this year. We recommend going online or calling your local Liberty Tax to set an appointment.”
Tax Day is April 18. Walk-ins are always welcome, but appointments are preferred as the deadline approaches by calling (816) 920-0217 or visiting libertytax.com. Liberty Tax at 3414 Independence Avenue offers Spanish translation.