As a trained, volunteer tax preparer with more than six years of experience, I’ve seen firsthand what tax season means for families.
Every spring, I sit across from parents who are anxiously waiting to find out how much their tax refund will be. For many, it’s not just extra money, it’s survival. They’re hoping the refund will cover overdue rent, car repairs, medical bills or maybe even something as simple as new clothes for their kids. For some, it’s the only time of year they can catch their breath.
Tax season isn’t just about crunching numbers on forms. It’s about the everyday lives of working families who are just trying to get by. I’ve witnessed parents cry tears of relief when they realize their refund will help them keep their heat on through the winter. But I’ve also seen heartbreak with families whose refunds barely scratch the surface of their needs.
One of the biggest misunderstandings I encounter is about the difference between deductions and credits. Deductions lower taxable income, but they don’t help low-income families since they already have little to no taxable income. For middle-income families, the impact of a deduction is often too small to make a real difference in their refunds.
A credit, however, provides direct financial relief. Refundable credits, in particular, are essential because they give money back even if a family owes little or no personal income taxes. Remember, households in this situation still pay sales tax and other fees to the state, often accounting for a very large share of their income.
Beyond providing immediate financial gain, a refundable Child Tax Credit can even cover Connecticut’s nearly $3 billion net tax deficit, according to the Tax Incidence Report recently published.
A refundable Child Tax Credit could help close that gap by encouraging more families to file taxes. When struggling families realize that they stand to benefit, compliance improves. Perhaps that’s why our neighbors in Massachusetts, New York and New Jersey already have state-level refundable Child Tax Credits. Increased tax revenue for the state is a win for both families and the economy.
Connecticut’s elected leaders have a choice this legislative session. We’ve seen record budget surpluses, but that prosperity isn’t reaching the families who need it most. For the families I work with during tax season, every dollar counts. Establishing a state-level refundable Child Tax Credit would give them the breathing room to meet their most basic needs and plan for a more secure future.
Every family deserves the opportunity to thrive. Every child deserves the chance to grow up safe, healthy and secure. It’s time for Connecticut to stand with our neighboring states and make families a priority in our tax code.
Leidy Diaz is Senior Operations Manager at SimplifyCT, Inc. / Stamford