Are you planning on claiming the Earned Income Tax Credit (EITC) or the Child Tax Credit (CTC) on your federal tax return this year? If yes, then you should know some things have changed since last year.
Child Tax Credit
The first thing you need to be aware of is that the Tax Cuts and Jobs Act changed the requirement for claiming the CTC. Eligible children must have a Social Security Number (SSN) that is valid for employment. If you have a newborn or another child for whom you do not have an SSN yet, you may want to visit your local Social Security office or apply online soon and get one before you have to file.
Earned Income Tax Credit
Under the EITC, eligible families with three or more qualifying children could get a maximum credit of up to $6,557. EITC for people without children could mean up to $529 added to their tax refund.
All workers who earned around $56,000 or less should learn about EITC eligibility and use the EITC Assistant to find out if you qualify before filing. The Assistant will help determine your filing status, if you have a qualifying child or children, if you qualify to receive the EITC, and estimate the amount of the credit you could get. If you don’t qualify, the Assistant explains why.
Also, before you file, you should check out the How Do I Claim EITC? The information there will tell you:
- the documents you need
- the common errors to avoid
- the consequences of filing an EITC claim with an error on the return
- what you need to do if your EITC was denied in a previous year
- how to claim the credit for earlier tax years
Another great resource is our Get Help page for Claiming the Earned Income Tax Credit.
Credit for Other Dependents
Dependents who can’t be claimed for the Child Tax Credit may still qualify you for the Credit for Other Dependents. This is a non-refundable tax credit of up to $500 per qualifying person. The qualifying dependent must be a U.S. citizen, U.S. national, or U.S. resident alien.
More families may be eligible for the Child Tax Credit or the Credit for Other Dependents. Both credits begin to phase out at $200,000 of modified adjusted gross income ($400,000 for married couples filing jointly), compared with 2017 levels of $75,000 for single taxpayers and $110,000 for married couples filing jointly.
In addition to the EITC, if you have children or other dependents, you may be eligible to claim the Child Tax Credit ($2,000 per qualifying child), the Additional Child Tax Credit ($1,400 per qualifying child), or the new Credit for Other Dependents ($500 per qualifying person). Don’t miss out on any of these credits! All are refundable and can put money in your pocket.