Claiming the right tax credits can wipe out your tax bill or maximize your refund. Many credits aim to help families, low-income earners and students. Regardless of your income, it’s good to have an idea of what’s available. Even with little to no tax knowledge, ezTaxReturn can help you file an accurate return to get every dollar you deserve. Here are some popular tax credits you can qualify for this year.
Earned Income Tax Credit
Some workers can claim the Earned Income Tax Credit and get a much-needed financial boost. To qualify, you must earn less than the adjusted gross income and investment income limits. For tax year 2022, the maximum amounts are as follows.
| Children Claimed | Single, Head of Household or Qualifying Widow(er) | Married Filing Jointly |
|---|---|---|
| Zero | $16,480 | $22,610 |
| One | $43,492 | $49,622 |
| Two | $49,399 | $55,529 |
| Three | $53,057 | $59,187 |
The investment income limit is $10,300.
The maximum Earned Income Tax Credit you can receive is:
- $560 if you don’t have any children
- $3,733 with one qualifying child
- $6,164 with two qualifying children
- $6,935 with three or more qualifying children
Child Tax Credit
The Child Tax Credit is worth $2,000 for each dependent on your tax return that’s aged 16 or younger. The child can be your son, daughter, stepchild, or even your grandchild. Your credit amount may be reduced if your modified adjusted gross income is more than $200,000 ($400,000 for joint filers).
Credit for Other Dependents
Some parents continue to take care of their kids through college. If you have an older dependent that doesn’t qualify for the Child Tax Credit or Additional Child Tax Credit, you may be able to claim the Credit for Other Dependents. It is worth $500 per dependent. However, you may receive less than that if your modified adjusted gross income exceeds $200,000 ($400,000 for joint filers).
Child and Dependent Care Credit
Most parents don’t have the luxury of working from home. Workers who pay someone to care for their child or dependent with disabilities while they go to work, may be able to claim the Child and Dependent Care Credit. To qualify, your expenses must be for a child aged 12 or younger, your spouse or another dependent who is mentally or physically unable to care for themselves. You can claim up to $3,000 in expenses for one qualifying person and $6,000 for 2 or more people. The credit amount ranges from 20-35% of your expenses depending on your adjusted gross income. You must have the care provider’s name, address, and taxpayer identification number to claim the credit.
The Saver’s Credit
Get rewarded for saving for your future. If you contribute to an IRA or employer-sponsored retirement plan, you can claim the Saver’s Credit. Depending on your AGI, the credit is worth 50%, 20% or 10% of your contributions up to $2,000 ($4,000 for joint filers). In other words, the maximum you can receive is $1,000 ($2,000 for joint filers). Here’s how much the 2020 credit may be worth for you.
| Credit Rate | Single, Married Filing Separately or Qualifying Widow(er) | Married Filing Jointly | Head of Household |
|---|---|---|---|
| 50% of your contribution | $0 – $20,500 | $0 – $41,000 | $0 – $30,750 |
| 20% of your contribution | $20,501 – $22,000 | $41,001- $44,000 | $30,751 – $33,000 |
| 10% of your contribution | $22,001 – $34,000 | $44,001 – $68,000 | $33,001 – $51,000 |
| 0% of your contribution | $34,001 and up | $68,001 and up | $51,001 and up |
There’s no need for a calculator when you do your taxes with ezTaxReturn.com. Simply fill in the details and we’ll calculate the appropriate credit amounts for you. So, you can complete your taxes without any stress or headaches.
American Opportunity Tax Credit
During the first four years of college, students (or their parents) can claim the American Opportunity Tax Credit for paying tuition and fees. The maximum credit is $2,500 per student. If the credit reduces your tax bill to zero, you can receive up to $1,000 of the remaining portion as a tax refund. Students must be pursuing a degree at an eligible institution, enrolled for at least part time for one semester and have no felony drug convictions. To claim the full credit, your modified adjusted gross income (MAGI) must be less than $80,000 ($160,000 for joint filers). You can receive a reduced credit if your MAGI falls between $80,000 but less than $90,000 (over $160,000 but less than $180,000 for joint filers). Once your MAGI is over $90,000 ($180,000 for joint filers), you no longer qualify.
Lifetime Learning Credit
If you’re looking for a new job or hoping to get a promotion, getting more education can make you a more attractive candidate. Plus, taxpayers who pay for college expenses can claim the Lifetime Learning Credit. You can claim it for you, your spouse or dependent. The Lifetime Learning Credit can reduce your tax bill by up to $2,000 per tax return. However, the credit amount gradually phases out if your MAGI is between $80,000 and $90,000 ($160,000 and $180,000 for joint filers). You no longer qualify once your MAGI exceeds $90,000 ($180,000 for joint filers).
