With the IRS tax season currently underway, many families are busy applying for rebates and tax credits. The federal government offers numerous programs for families, specifically low- and middle-income families, to decrease their tax liability. One of the most well-known credits is the Child Tax Credit as well as the Additional Child Tax Credit. However, if you did not qualify this tax season to receive these credits, you may still be able to receive a $500 tax credit.
The Child Tax Credit provides $2,000 per child
One of the most well-utilized tax credits each year is the Child Tax Credit. If you are a single filer earning below $200,000 or are a married couple filing jointly earning less than $400,000, you can check to see if your dependents mean you qualify for a $2,000 tax rebate. The credit applies for each qualifying child, of which up to $1,700 is refundable. Children must be 17 years old or younger to qualify, as well as meet other qualifying criteria.
However, this year may be the last year that you can expect to receive a Child Tax Credit worth $2,000. Before the TCJA, the credit was worth $1,000 per qualifying child. It was increased in light of the major economic difficulties families had to cope with during the pandemic. From next year, the credit may be reverting to its original value of $1,000 per qualifying child, but this has not been confirmed yet.
If you qualify for the Child Tax Credit, you can also qualify for the Additional Child Tax Credit. This refers to the $1,700 refundable portion of the Child Tax Credit. While the Child Tax Credit reduces how much you owe in taxes to the IRS, the refundable portion of the credit that you qualify for through the Additional Child Tax Credit allows you to receive money back which is left over after your total tax liability has been reduced.
You can still claim this $500 credit this month
If you were recently rejected from receiving the Child Tax Credit, you can still apply for the Other Dependents Credit. According to the official IRS website, this credit is for taxpayers who have dependents who rely on them but do not meet the criteria to qualify for the Child Tax Credit. This credit can be claimed on top of the Child and Dependent Care Credit and the Earned Income Tax Credit.
If your dependent meets the qualifying criteria, each dependent allows you to claim $500 in credit. According to the IRS, the following criteria must be met by your dependents:
- Dependents of any age, including those who are age 18 or older.
- Dependents who have Social Security numbers or Individual Taxpayer Identification numbers.
- Dependent parents or other qualifying relatives supported by the taxpayer.
- Dependents living with the taxpayer who aren’t related to the taxpayer.
In addition to this (and similarly to the Child Tax Credit requirements), to be eligible to receive the credit, your income cannot exceed $200,000 if you are a single filer and it cannot exceed more than $400,000 if you are a married couple filing jointly.
Check to see if you qualify to receive a refund or not
With the deadline for filing your taxes fast approaching, many taxpayers who have already filed may be expecting to receive a refund. However, it is important to remember that a refund is not guaranteed after filing your taxes. In addition, certain individuals may not qualify to receive a refund. However, it is important to be on the lookout for any contact from the IRS, as they may need additional information from you to ensure that your taxes are filed correctly which could give you a refund once successful.
