As tax season approaches, it’s important to know the tax credits you may be eligible for in 2023. Tax credits are a way to reduce your tax liability, and several credits can help you save money on your taxes. The following are helpful for families specifically.
The EITC is a tax credit for low-income working individuals and families. The credit is based on your income and family size and can provide a significant tax break. For the tax year 2023, the maximum credit for a family with three or more children is $6,935.
To qualify for the EITC, you must have earned income from a job, be a U.S. citizen or resident alien, have a valid Social Security number, and meet specific income requirements. You can find more information about the EITC on the IRS website.
The CTC is a tax credit for families with children under 17. The credit can be worth up to $2,000 per child, and up to $1,500 can be refunded even if you don’t owe any taxes. You can claim the total amount of the Child Tax Credit if your income is $200,000 or less as a single tax filer or $400,000 or less as a joint filer. You can find more information about the CTC on the IRS website.
Parents who pay for childcare to enable them to work may be eligible for the Child and Dependent Care Credit. To qualify, both you and your spouse (if filing jointly) must have earned income. The credit can be claimed for up to 35% of $3,000 in childcare expenses for a single child under age 13 or up to $6,000 in childcare expenses for two or more children under age 13. You can find more information about the CDCC on the IRS website.
The AOTC is a tax credit for college students or their parents. The credit can be worth up to $2,500 per student and can be claimed for up to four years of undergraduate education. To qualify for the credit, the student must be enrolled in a degree or certificate program at least half-time and meet specific income requirements. You can find more information about the AOTC on the IRS website.
In conclusion, tax credits are an important way to reduce tax liability and save money on taxes. If you think you may be eligible for any of these credits, check with your tax preparer or consult the IRS website for more information.
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