January 23 is the beginning of the official tax season and parents may be eligible to claim different tax credits as well as deductions.
Eligible Parents Can Claim Up To $14,890 In Tax Season
It’s wise for parents to carefully review all documents to ensure there are no missing important tax credits to qualify for when filing. You might have heard of credits like the Earned Income Tax Credit (EITC) or the child tax credit (CTC) however there are more benefits that you might be e eligible to file for. Moreover, depending on income, taxpayers claiming children are likely to receive a larger return or a reduced amount owed.
Tax credits and deductions that most parents should review with their tax software or tax preparer. Just note that all 2022 tax returns and deadline requests are due on April 18.
List Of Benefits You Can Apply During Tax Season This 2023
Earned Income Tax Credit (EITC)
The EITC is for low-income to moderate income and may reduce the amount of tax that taxpayers owe. To be eligible you must meet the requirements and should file a tax return. EITC reduces your tax to less than zero. Moreover, taxpayers must have earned income and adjusted gross income within certain limits and meet certain basic rules.
Additionally, they must meet the rules for those without a qualifying child or have a child that meets all the qualifying rules for taxpayers or their spouses if they file a joint return. To review your eligibility, head to the IRS website and use the EITC Assistant tool.
Those with one child with an adjusted gross income of $43,492 and are filing a return alone may claim up to $3,733 in a refundable tax credit. This also applies to those with a modified gross income of $49,622 and filing a joint return with a spouse. Even if you don’t owe any taxes for 2022, you could receive $3,733.
Child Tax Credit (CTC)
The CTC will lessen the amount of money you owe on your federal taxes. The payment will vary on your income plus the number of qualifying children you’re claiming. In 2023 CTC reverted to its original credit amount worth $2,000.
Head of House Status (HOH)
The Head of Household (HOH) status is typically used by unmarried taxpayers who are sustaining and housing a qualifying person. To qualify for HOH you should be unmarried and pay over half the cost of supporting and housing that qualifying person.
Adoption Tax Credit
Families who adopt children in 2022 are entitled to claim up to $14,890 in eligible adoption expenses for each eligible child under the Adoption Tax Credit.
In addition to federal credits and deductions, some states are giving their version of CTC.
- Around 115,000 households across Rhode Island can be anticipated to grab $250 for each qualifying child.
- In Vermont, parents will get a $1,000 child tax credit for every child age five and under, to households earning $125,000 or below.