Are you getting all your eligible tax breaks for 2021 returns?

For this tax season, with several new credits available due to the pandemic, the Democratic Party of Hawaiʻi has put together a list of potential tax relief for residents.

The American Rescue Plan, which President Joe Biden signed into law last March, made significant changes to two critical tax relief programs:

• Child Tax Credit. This was expanded from $2,000 per child to $3,600 for children under 6 and $3,000 for children between 6 and 17. This is estimated to provide additional relief for the families of 278,000 children in Hawaiʻi.

• Earned Income Tax Credit (EITC):  This was nearly tripled for approximately 69,000 workers in Hawaiʻi without dependent children, going from about $540 to $1,500. Younger workers (19-24) who are not half-time or full-time students, and older workers (65+) were also made newly eligible for the expanded EITC. This is the first time that the EITC was increased for workers without dependent children since 1993.

As a reminder, Hawaiʻi families must file a tax return in 2022 to receive the second half of the Child Tax Credit. While the families of approximately 61 million children nationwide – and 268,000 children in Hawaiʻi – received advance monthly Child Tax Credit payments between July and December 2021, families need to file a tax return to receive the second half.

By filing a tax return, families that did not receive the advance payments in 2021 can still get the full Child Tax Credit, as well as the up to $1,400-per-person Economic Impact Payment that they might have missed. Some taxpayers with qualifying children – like those who welcomed a new keiki in 2021 or those who haven’t filed taxes in recent years and did not use the non-filer portal – can get their full Child Tax Credit by filing their tax returns.

Many families who are eligible for the Child Tax Credit are also eligible for the Earned Income Tax Credit and can get thousands of dollars in additional tax relief by filing their tax return this year. 

More information can be found at ChildTaxCredit.gov, which was recently revamped to add new features to help taxpayers file their taxes and access the remainder of the expanded Child Tax Credit, the full amount of the Child Tax Credit, and/or the Earned Income Tax Credit as tax filing season begins.