BOSTON — National nonprofit Commonwealth has announced the launch of its Tax Time Crisis hub (taxtimecrisis.org) to provide tax preparers and other service providers with critical information about how families can take advantage of new tax rules. Due to a key “lookback” provision in Congress’ second COVID-19 relief package, low-income families will need to take action to preserve their Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) refunds, often worth thousands of dollars.

Commonwealth will hold a webinar to discuss the implications of this provision, and what tax preparers that work with low-income families should understand, on January 28. Commonwealth’s Senior Policy Manager, Jason Ewas will moderate a discussion with, along with Nina Olson, Executive Director of the Center for Taxpayer Rights, Annelise Grimm, Associate Program Director at Code for America, and Alan Gentle manager of the Roxbury Center for Financial Empowerment in Boston.

Commonwealth and its coalition partners Neighborhood Trust Financial Partners and SaverLife first sounded the alarm on a potential tax time crisis in November, when the organization’s analysis demonstrated that millions of low-income families who had experienced long-term unemployment in 2020 were now at risk of receiving tax refunds up to 80% below their 2019 refund, driven by decreased tax EITC and CTC credits. The tens of billions of dollars in EITC and CTC credits can provide up to 25% of a family’s annual income, and stimulate spending in local economies.

“Tax refunds are often the largest financial windfall that low-income families see each year and a brief reprieve from chronic financial anxiety,” said Commonwealth Co-Founder and Executive Director Timothy Flacke. “Our research has shown that these tax refunds offer a financial lifeline for low-income families, particularly for single-parent households.”

Families of color would have been disproportionately impacted by this crisis – 5 million Black households, 6 million Hispanic households and more than 32 million children. For families across the country, these refunds could not come at a more important time. As recent data show, the economic crisis for low-income families continues to worsen and many have exhausted resources and reserves, 

“The relief package can enable people to receive tax credits as they have in years prior, but it is essential to understand that this is not automatic. Tax filers will need to take action to maximize their refunds,” Flacke continued. “Right now, it’s critical that we disseminate this information to partners who assist with tax filing and other financial services for these families.”

With the lookback provision, families can choose their 2020 or 2019 earned income when determining eligibility for the EITC and CTC, protecting thousands of dollars in tax refunds in early 2021. Organizations working with families eligible for these credits can visit taxtimecrisis.org to sign up for the latest information and access resources on filing from the experts at Commonwealth, Neighborhood Trust Financial Partners, and SaverLife.

About Commonwealth

Commonwealth is a national nonprofit building financial security and opportunity for financially vulnerable people through innovation and partnerships to change systems. Black, Latinx and Women-led households disproportionately experience financial insecurity due in large part to longstanding, systemic racism and gender discrimination. Commonwealth’s collaborations with consumers, the financial services industry, fintechs, employers, policymakers and mission-driven organizations result in solutions that are grounded in real life and based on a deep understanding of financially vulnerable people. Commonwealth has designed effective innovations, products, and policies enabling over 750,000 people to accumulate more than $3 billion in savings. For more information, visit buildcommonwealth.org.