Tax Credits That Can Earn Individual Taxpayers a Refund
Some taxpayers might qualify for tax credits that can result in money in their pocket. Most people don't even realize that they may be awarded a refund. Some examples are:
A tax credit is the amount of money that taxpayers can subtract from their owed taxes to the government. Even taxpayers who are not obligated to file tax may file for these, as you might receive some tax returns, without even knowing.
To find out if you are eligible for some tax credit, read the text below:
Earned Income Tax Credit
Taxpayers who earned at least $53,930 during the previous tax year are eligible for the EITC, which you can receive a refund. You meet the requirements for the credit with or without a qualifying child and may be eligible for about $6,318. To find out whether you qualify or not, you can use the 2017 EITC Assistant tool.
Premium Tax Credits
If a household/family earns less than a certain amount, they can be eligible for premium tax credit. This means you can cover premiums for health insurance in advance. To do so, you must file for tax return to settle any advance payments with the permissible premium tax credit. Moreover, if a taxpayer signed up for health insurance through the Health Insurance Marketplace in 2017 but did not receive any advance credit payments might qualify for a premium tax credit at the time of filing. Use the Interactive Tax Assistant to determine if you qualified.
Related: Tax Day 2018 Is Not April 15th
Additional Child Tax Credits
You may be eligible for the additional child tax credit if you have at least one child who qualifies for the child tax credit. This credit is for you if you receive less than the entire amount of the child tax credit.
American Opportunity Tax Credit (AOTC)
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AOTC is available to students during the first four years of their higher education, in the form of qualified education expenses paid. To receive AOTC the spouse or dependent of a taxpayer must be enrolled for at least half-time for an academic period. It is available for four years of post-secondary education.
Taxpayers can receive up to $2,500 for every student who is eligible. Your qualification doesn’t depend on whether or not you owe taxes. The sole requirement is completing Form 1098-T. Students can receive the form from their school but do note that some exceptions apply to students. As the taxpayer, you are responsible for filing Form 8863 along with your return.
By law, IRC must hold EITC or ACTC refunds until mid-February, even if it’s not associated with them. The IRS announced that the refunds would be available to the taxpayers either via their debit card or account. This would be around the end of February, if they choose direct deposit.
You can find the filing requirements for income tax via Forms 1040, 1040A, and 1040EZ. You can access the IRS website to find information related to filing taxes, including clear requirements for filing.
The information in this article is relevant to 2017 and does not reflect the changes imposed by new or amended acts and regulations. A number of these changes will come into effect in 2018 and will impact the tax returns in 2019.
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