With the tax season currently underway, multiple rebates, credits, and refunds are set to go out in addition to the IRS Social Security payments. Every month, the IRS sends out millions of payments to families. The Child Tax Credits and Additional Child Tax Credit payments are currently in the process of being sent out. However, if you did not qualify for these credits, you can still apply for the Other Dependents Credit this month.
Child Tax Credit: An important tax initiative
The Child Tax Credit is one of the biggest federal tax rebate programs in the country. Millions of families apply for the credit each year to help assist with the expenses associated with children. To apply for the Child Tax Credit, both your children and income must meet certain requirements, according to the IRS official website. If you are a single tax-filer, you may not earn an income above $200,000 to apply for the Child Tax Credit, and if you are a couple filing jointly your income may not exceed $400,000.
Currently, the Child Tax Credit provides $2,000 per qualifying child, with up to $1,700 of the $2,000 being refundable. Children must meet requirements to be eligible for this credit, including being under the age of 17 and being a full dependent of the taxpayer. The credit is set to be reduced by half from next year, as the credit was increased to $2,000 during the COVID-19 pandemic.
You can expect to receive your credit typically within 21 days of filing your tax return if there are no complications, such as an IRS audit or errors when claiming.
Apply for the Other Dependents Credit
While the Child Tax Credit is approved for millions of families, some do not meet the qualifying criteria. If you find yourself in this case, you can still apply for the Other Dependents Credit. Under this credit, you can receive $500 for each dependent who does not qualify for the Child Tax Credit or the Additional Child Tax Credit. The credit was first introduced in 2017 through the Tax Cuts and Jobs Act.
While your child may not meet the requirements for the Child Tax Credit, there are still requirements for you to receive the Other Dependents Credit:
- Your dependent must be declared as a dependent on your tax return
- The dependent must not be eligible for the Child Tax Credit or the Additional Child Tax Credit
- Your dependent must be a United States citizen, a resident alien, or a US national
- The dependent must have an SSN, ITIN, or ATIN that was issued before the due date of the return (including extensions)
Unlike the Child Tax Credit, the Other Dependents Credit is valid for any dependent and is not limited to dependents who are your children. Similarly to the Child Tax Credit, as a single tax filer, your income must be below $200,000 and joint filers’ income must not exceed $400,000 if you wish to apply for the Other Dependents Credit.
Other tax credits you can expect this month
In addition to other tax rebates and credits, you can also apply for the Earned Income Tax Credit. This tax credit is specifically intended for low-income individuals to alleviate them from their tax liability. The credit is open to those with and without children. To qualify for the credit, you must have an annual income below the threshold of $25,511 a year if you do not have children or receive a maximum of $66,819 a year if you have three or more children.
You can also claim the Earned Income Tax Credit for the past three years. For 2021, you have until April 15 to claim for the year 2025.
Make sure when you are applying for any tax credit that you always file a tax return even if your income is below the required amount which qualifies you to pay taxes.
