Tax Breaks in Connecticut for Low Income Families
Connecticut offers programs designed to assist low income families as well as incentives to encourage low income housing developments. In addition to help at the state level, tax breaks are provided by federal programs.
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Earned Income Tax Credit
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The Earned Income Tax Credit gives low and moderate income families a way to reduce taxes even further. The amount of the tax credit is increased when there are more children claimed. The maximum credit in 2010 was $5,666 when a taxpayer had three or more children and earned less than $43,352. For two children and an income ceiling of $40,363, the tax credit was $5,036. With one child and income less than $35,535, the credit was $3,050. Even without children to claim, if a taxpayer earned less than $13,460, they were entitled to a tax credit of $457. If the family filed married and jointly, the only difference is the ceiling for the income amount, which increased by a very small margin.
Low Income Housing Tax Credit
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This program is aimed at housing developers. It provides incentives for developers to build, buy or fix low income housing. This tax credit offsets the development costs. To qualify, a developer must be in the business of providing low income rental units and must comply with the "set aside" provision, meaning 20 to 40 percent of the development must be set aside for low income residents, and the remainder is for median income residents.
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Child Care and Development Fund
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The state of Connecticut uses the Child Care and Development Fund to help families with child care costs. The fund offers weekly reimbursement rates to child care centers and school-operated programs; family child care homes; and care by relatives, on a full time, full time extended, half time and quarter time basis. The rates vary depending on if the recipient falls within the eastern, north central, northwest, south central or southwest divisions. The highest weekly rates are paid to child care centers and schools.
Connecticut Energy Assistance Program
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This program helps low income families pay their heating bills in the winter months. To qualify for the program, the family's gross income must be below a defined threshold, and they must pass a liquid assets test. The test takes all of the family's assets like bank accounts, stocks and savings plans; it adds the assets to the gross income. If it is still below a given threshold. For qualifying home owners, the minimum assistance amount is $605 and goes up to $880. For families where heating is part of the rent, the minimum amount is $380 and goes up to $410.
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