Service providers, advocates, and community groups are encouraged to continue reminding individuals experiencing homelessness that they can still be eligible for the stimulus payments and other tax credits, even though they may not have a permanent address or bank account. The Internal Revenue Service (IRS) issued a press release earlier this month outlining considerations for people experiencing homelessness.
Federal Stimulus Payments
In April 2021, LAHSA wrote about how individuals experiencing homelessness can access stimulus checks. As stated in the post, individuals will still need to file a tax return to be eligible for any of the stimulus checks, have a valid Social Security Number (SSN), and cannot be claimed as a dependent of another taxpayer.
Federal Tax Benefits
Households experiencing homelessness may also be eligible for other tax credits, including the upcoming Child Tax Credit (CTC) and the Earned Income Tax Credit (EITC).
The CTC is available for parents with dependent children and is designed to reduce child poverty and help ease the financial burden that families incur when they have children. The CTC was recently expanded and increased for one year through the passage of the American Rescue Plan Act. The first monthly payment of the new expanded CTC will be made on July 15, 2021 and can be received through direct deposit, a paper check, or a debit card. Some people will also be able to get advance payments of the CTC later this year.
There is no minimum income required to the CTC for tax year 2021 but the upper income limit for the full benefit is $150,000 per year for married couples and $112,500 per year for head of household filers. Children (including those who are DACA recipients) must have a valid SSN and be aged 17 or younger to be eligible for the CTC but parents can be Individual Taxpayer Identification Number (ITIN) filers. Receiving the CTC will not affect a person’s immigration status.
There is nothing those who qualify need to do at this point other than file a 2020 tax return. If a household has not yet filed a 2020 tax return, the IRS may use information from a 2019 tax return to determine eligibility. If there is no tax return on file, a household may experience delays in receiving the CTC if they file after May 17, 2021.
Additionally, people experiencing homelessness who are employed may also qualify for the EITC, even if they earned too little income during 2020 to owe tax. To qualify, federal law requires that a worker live in the U.S. for more than half of the year, file a tax return, and meet other requirements. Individuals experiencing homelessness, including those who have resided at one or more homeless shelters, can meet the residency requirement. For 2020, the income limit is $15,820 for single individuals with no children and $21,710 for couples with no children, while the income limit is higher for people with children. For example, the limit is $50,594 for single individuals with three or more children and $56,844 for couples with three or more children.
Employers, advocates, service providers, and other community groups are encouraged to continue messaging the availability of these critical resources for individuals who are experiencing homelessness. For more outreach and communication materials, please visit the IRS resource page here.