As with any tax credit, refund or deduction, there are a few rules that will influence the amount that eligible applicants will receive.
Here is a breakdown of everything you need to know about the Child Tax Credit and Additional Child Tax Credit
How Much do You Get Back in Taxes for a Child?
The child tax credit for 2020, 2021, is worth up to $2,000 per child that is under the age of 17. To be eligible to claim the child tax credit, your child or dependent must first pass all of the eligibility tests:
Must be 16 or younger on the last day of the year
Must be a US citizen, US national, or a resident alien
Must be claimed by you as a dependent
Must be related to you by blood, or step relationship, or legally adopted child/foster child
Must have resided with you for more than half of the year (special rules apply for special circumstances such as divorce)
You must have provided them with more than half of their support
What is the New Child Tax Credit Amount After Tax Reform Changes?
The earned income credit is one of the most valuable credits for those with low or moderate incomes. To claim it you will need to file an income tax return, even if you don’t necessarily owe anything in taxes.
The Earned Income Tax Credit (EIC) is a credit that is for low to moderate-income taxpayers to get ahead and have more money in their pockets. It can boost refunds significantly if you can meet the eligibility guidelines to claim it.
For example, if you are employed, but your income is considered “low” by the IRS, you may be able to claim the earned income tax credit, which currently has a maximum credit amount of $6,660.
Below you will find the EIC table chart and some of the most common questions that taxpayers have about the Earned Income Credit.… Read the rest
An increasing number of people are turning to TurboTax to get their income tax prepared and filed every year. They take all the hard work and stress out of tax form preparation and will always get you the largest refund.
As you go through the process of importing income and expense information into the TurboTax Online Software, you will see possible tax deductions and credits that you may qualify for, and how much money you can save on your tax bill.… Read the rest
The Additional Child Tax Credit is an important tax credit that every parent should be aware of.
But what you must keep in mind is that sometimes you can’t take advantage of the Child Tax Credit because the value of the credit is more than you owe in income tax. If you can’t benefit from the credit fully you can claim the Additional Child Tax Credit.
This can give you a payment for the part of the Child Tax Credit you couldn’t take off against your taxes for the reason mentioned above.… Read the rest
Getting a tax credit is almost as good as not having any taxes to pay at all. Tax credits allow you to deduct sums of money from your taxes. This is better than getting a deduction because it not only reduces your taxable income it gives you a credit. For example, those in the 28% tax bracket would save $280 in taxes. However, you would need $3,571 in deductions to save $1,000 in income taxes.