With the start of the year, the 2023 tax filing deadline is also approaching fast.
2023 Tax Season
Several taxpayers across America are ready to file their taxes in time to avoid penalties, but also to enjoy some of the multiple tax credits available to them. During Covid19 the trend started in which individuals have been receiving bigger tax refunds than before, given the emergency funds that were handed out to help residents go through the pandemic.
The Four Major Tax Credits
This year there will be four major tax credits that most taxpayers will be able to apply for, earned income tax credit, child tax credit, solar tax credit, and electric vehicle tax credit.
Earned Payment In Tax Credit
Earned income tax credit also known as the EITC or EIC, individuals and households making low to moderate income can apply to receive $600 per individual, while families can access $3,955 for one child, $6,604 for two, or $7,430 for three or more children.
This tax credit will be deducted from the taxes an individual has to pay or added to their refund at the end of the year.
Child Tax Credit
The child tax credit is perhaps the most popular tax credit available. This famous tax credit was not changed at a federal level for this year and will remain at $2,000 per qualifying child.
Those who want to claim a child tax credit cannot have an income over $200,000, with this amount coming up to $400,000 for married couples that file their taxes jointly. Other states even offer their child tax credit, so some lucky Americans will be able to receive double benefits from this tax credit.
Solar Tax Credit
Here’s what you need to know regarding the federal solar tax credit in 2023:
- 30% tax credit for residential and commercial solar installation with no cap
- Available from 2022 until 2032 and the step-down schedule begins in 2033
- Solar batteries, including standalone batteries, are eligible
- Can be carried over if the credit exceeds your tax liability
The US government is marching towards a more green energy-run country in the next few years. Leading tax credits are available to those who change their old appliances for more efficient ones, with homeowners and renters being able to receive up to $8,000 for the purchase.
New Clean Vehicles Tax Credit
Taxpayers who acquired an electric vehicle costing less than $55,000 could qualify to receive $7,500 in tax credits, as long as they earned less than $150,000 as a single filer.