This post is originally published at National Women’s Law Center and is cross-posted with permission.
Advocates serving survivors of domestic violence know that survivors face a number of pressing needs – including safety or shelter or immediate access to cash. Many advocates and survivors may not think about tax issues when they are dealing with those others. But taxes can be an important way for survivors to establish economic independence – and there are some potential pitfalls that survivors need to be aware of. Read on to learn more!
Q: Should my client file a tax return on her own?
A: If your client is married, there are a couple of things she needs to think about before she files her taxes. If she files using Married Filing Jointly status, she will be on the hook for any tax liability (unless she qualifies for innocent spouse relief), and she will need to sign the return along with her husband. If she files using Married Filing Separately status, she will not be eligible for many tax credits, like the federal EITC, the federal Child Tax Credit, or the federal Child and Dependent Care Tax Credit, that could otherwise give her a financial boost (see below). If she files as Single or Head of Household, however, she will not be subject to joint tax liability and she may qualify for credits like the EITC. She can file as Single if she is legally separated from her husband. If she is either legally separated OR lives apart from a spouse for the last 6 months of the year and pays half of the costs to maintain a household where a dependent child lives for over half the year, she can also file using Head of Household status.
Q: Both my client and I are overwhelmed by the process of filing taxes. Where can we go for help?
A: You should not offer specific tax advice to your client (unless you are a tax lawyer or accountant)! For help filing tax returns, low- and moderate-income families (those earning under $45,000 or so) can get help at IRS-sponsored VITA sites. To find a VITA site near you, call (800) 906-9887 or click here. For help with specific tax questions and representation, you can consult Low-Income Taxpayer Clinics. To find an LITC in your area, visit click here.
Q: My client thinks she may owe money to the IRS. Are there options if my client can’t pay what she owes?
A: Yes! Survivors may be eligible for relief from filing penalties, or tax problems caused by a spouse or former spouse. In addition, a survivor can ask the IRS to hold off on collections, to make installment payments, or to make an offer-in-compromise to lower the total amount due to the IRS, under certain circumstances. For more information, contact a Low-Income Taxpayer Clinic near you or the Taxpayer Advocate Service ((877) 777-4778).
Q: Are there any tax credits my client should be aware of?
A: Yes! Eligible tax filers can receive up to $5,891 from the federal Earned Income Tax Credit (EITC), up to $1,000 per child from the federal Child Tax Credit (CTC), and up to $2,100 from the federal Child and Dependent Care Tax Credit. The EITC and CTC are refundable, and many states offer their own versions of these credits as well! Visit nwlc.org/loweryourtaxes to find out what tax provisions are available to survivors in your state.
Q: My client is worried that her abuser will intercept her refund. What can she do?
A: Many domestic violence organizations have established address confidentiality programs, or will permit survivors to receive mail at the organization’s mailing address. Or the survivor can have the refund direct-deposited to a bank account. And some VITA sites have options for pre-paid debit cards for tax filers without bank accounts.
Q: Where can I go for more information?
Amy K. Matsui is Senior Counsel and Director of Women and the Courts at the National Women’s Law Center. She works on economic issues affecting low- and moderate-income women and families, with special emphasis on federal and state tax policy and women’s retirement security. Her work with retirement savings policy and federal and state tax credits for working families comprises policy analysis, federal advocacy, and public education and outreach. She also directs the Center’s advocacy efforts around federal judicial nominations and diversity in the federal judiciary. Ms. Matsui has worked at the Center since 2002. Prior to joining the Center, Ms. Matsui practiced commercial law in the private sector. She clerked for the Honorable Carolyn Dineen King, then-Chief Judge of the Fifth Circuit Court of Appeals, in 2000. She is a graduate of the University of California at Berkeley, and Stanford Law School.