As tax season unfolds in 2024, eligible Michigan residents are urged to seize the opportunity to claim the Working Families Tax Credit, also known as the Earned Income Tax Credit (EITC). This tax credit, designed to alleviate the financial burden on low and moderate-income families, can lead to substantial reductions in both federal and state taxes, potentially resulting in a tax refund. With legislative changes in 2023, Michigan Governor Gretchen Whitmer emphasized the significance of this credit, highlighting the potential for an average refund of over $600. In this article, we will explore the details of the Working Families Tax Credit and guide eligible residents on how to make the most of this valuable tax benefit.
Understanding the Working Families Tax Credit:
The Working Families Tax Credit, or EITC, is a federal and state initiative aimed at providing financial relief to qualifying individuals and families. It offers the potential for a significant refund based on income, filing status, and the number of dependents claimed. The credit not only reduces the amount of federal income tax owed but also presents an opportunity for a state-level credit, offering an additional 30% credit when filing the state income tax return.
Key Legislative Changes and Benefits:
Governor Whitmer’s commitment to supporting Michigan families is evident in the 2023 legislative changes that quintupled the state’s credit, resulting in an average combined refund of $3,150 for around 700,000 Michigan families. This boost in the credit aims to put more money in the pockets of residents, providing essential financial support for covering bills, putting food on the table, and purchasing school supplies. Governor Whitmer encourages all eligible Michiganders to take advantage of this credit during the tax filing process.
Even if a taxpayer owes no federal tax or is not required to file a tax return, it is crucial to file a federal income tax return if they meet the requirements to receive the Working Families Tax Credit. Failure to file may result in missing out on this valuable benefit. Additionally, the state provides an extra 30% credit to those who receive the federal credit when filing their state income tax return.
To ensure accurate and efficient filing, eligible individuals are encouraged to consult with reputable tax preparers or use tax preparation software. State Treasurer Rachael Eubanks emphasizes the importance of checking eligibility and seeking assistance if needed, as the extra income provided by this tax credit can significantly contribute to meeting living expenses and caring for children.
In a further effort to support working families, Governor Whitmer’s office announced the distribution of supplemental checks in mid-February. These checks, constituting a 24% adjustment, are part of the $1 billion in tax cuts signed into law in 2023. Residents who qualified for the Working Families Tax Credit on their 2022 tax returns will receive these checks, providing an additional boost to their financial well-being.
As Michigan residents prepare for tax season in 2024, claiming the Working Families Tax Credit is a crucial step in maximizing available benefits. With legislative enhancements, increased refunds, and supplemental checks, Governor Whitmer’s commitment to empowering Michigan families financially is evident. Eligible individuals are encouraged to file their federal and state tax returns diligently, ensuring they receive the full advantage of this valuable tax credit and supplemental support.