Over half of Minnesotans are eligible for free tax filing help
ST. PAUL — As many as 800,000 low- and middle-income Minnesotans could get free help filing their taxes, but don’t take advantage of it.
Tax-preparation companies and nonprofits offer free software and services that nearly 65 percent of Minnesota taxpayers may qualify to receive. Services are income dependent and available across the state.
“This ensures taxpayers get the most out of their refund by capturing all qualifying credits and deductions they are eligible for,” said Lt. Gov. Peggy Flanagan, who joined tax officials and nonprofit leaders Thursday, Feb. 7, to discuss how important tax credits and refunds were for many families.
“The earned income tax credit is the nation’s largest anti-poverty tool,” Flanagan said, noting the credit pulled 6 million people nationwide above the poverty line. However, one in five people who could receive the credit don’t claim it.
Cynthia Bauerly, state revenue commissioner, said if there was ever a good year to try out free tax preparation services, this was the year. Minnesota did not update its tax code to match changes in the 2017 federal Tax Cuts and Jobs Act, so state returns will be more complex this year.
“This year, especially given the changes at the federal level, we are encouraging all Minnesotans to electronically file their returns,” Bauerly said.
About 90 percent of Minnesotans already file tax returns electronically and three out of four receive refunds via direct bank deposit.
Eligibility for free help varies by the provider, but in general, software is available to people earning less than $66,000, taxpayers receiving the working family tax credit and active military members. Eligibility for no cost, in-person services also varies.
About 300,000 Minnesotans are eligible for the federal earned income credit and its state equivalent. That money is essential for families to catch up on expenses and sock a little money away for unexpected emergencies, said Tracy Fischman, executive director of Prepare + Prosper.
“In fact, the earned income tax credit is associated with better health and better outcomes for children,” she said.
Fischman’s organization has been offering free tax preparation help for more than 45 years. Each year, they aid 13,000 people, helping them get around $23.5 million in tax refunds.
Prepare + Prosper is part of the Volunteer Income Tax Assistance, or VITA, network and has about 550 certified and trained volunteers. The VITA program has a 94 percent accuracy rate, the highest in the country, she said.