It's that time of year when many local residents have begun counting down to April 15. What's new is COVID-19 and how to account for it.
Many are struggling financially during the pandemic and some residents wind up at the Volunteer Lawyers Project Low-Income Taxpayer Clinic for help with their income tax returns.
These aren’t typically people looking for help putting their tax return together, but more often navigating the tangled lines and rules of returns.
"The biggest area that we see is the Earned Income Tax Credit," said lawyer Zahra Salih. "That becomes problematic with self-employed individuals because a lot of times they don’t have the record-keeping mechanism to prove that they actually earned this income and that they are eligible for the credit. I haven’t seen too many people being paid off the books, but I’m sure there is a lot of that out there."
In this COVID year, Salih said other frequent questions relate to stimulus checks and unemployment benefits.
"Many people received unemployment and, unfortunately, unemployment does count as taxable income that should be reported on your tax returns," she said. "The downside to that is that it’s not considered earned income. So a lot of low-income taxpayers were used to receiving a higher earned income tax credit and they really depend on this portion of their refund."
Salih said many of her clients don’t have English as their primary language, so the clinic provides brochures in many languages. It also has translation services available and runs education and outreach programs to explain how the tax system works.
Two clinics, in Buffalo and Batavia, serve the 20 counties in the Buffalo-Rochester region. Clients also must meet income and asset eligibility requirements.