These tax credits could bring you and your family a larger tax refund this year.
You’ve got a bit more time to file your taxes this year, since the IRS extended the tax deadline to May 17 instead of the usual April 15 (you can also file for an extension, if you need even longer). Even better: This year, there are a bunch of tax credits that you might be able to claim to get a larger tax refund, or lower the amount you owe. Some have been around, some are expanded, and some are new as a result of the pandemic.
For example, the child tax credit has been expanded this year thanks to the March stimulus law, bringing more money to lots of people with children. And if you’re still missing a first or second stimulus check, you can claim those funds on your tax return as well — even if you don’t usually file taxes.
Here are seven of the credits you can claim on your taxes this year that could bring your family more money.
Recovery rebate credit: Claim your missing stimulus money on your taxes
While most people got their first and second stimulus check automatically, some did not, due to IRS errors or their status as tax non-filers (which often includes those who are retired or part of the SSI/SSDI programs). If you didn’t receive the full amount that you were owed from the first check (up to $1,200) or the second check up to $600), or were missing money for any of your dependents, you can claim that money on your 2020 tax return. This is called a recovery rebate credit — here’s how to file for it. You’ll have to file a return to get this credit, even if you don’t usually file taxes.
Read more: Best tax software for 2021
Stimulus check 3: How much money you’ll get
Earned income tax credit: Claim this depending on your income in 2020
Designed to benefit people with lower incomes, the earned income tax credit can reduce your taxable income and wages. Under the Taxpayer Certainty and Disaster Tax Relief Act of 2020, part of the December coronavirus relief package, you can use your 2019 or 2020 amount of earned income to calculate your tax credit for 2020 — a potentially important provision for people who lost their jobs during the pandemic.
Note that if you claim this credit, the IRS may request additional information, which could result in your refund being delayed.
Child tax credit: If you have kids, you could get more money this year
The child tax credit is designed to benefit working families by allowing them to claim a refundable credit per qualifying child. Under the new stimulus law, the amount you can claim has gone up: Instead of the previous $2,000 per child, you can now claim $3,600 per child under age 6 and $3,000 for children over age 6. Even parents of babies born or adopted in 2021 can take advantage of the credit this year. Money from the credit will be split, with half paid through your tax refund, and the other half paid monthly from July to December. (Find out more about tax credits for parents here.)
Find out if your family qualifies for the expanded child tax credit here. As with the earned income tax credit, claiming this credit may trigger a request for additional information, which could delay your refund.
Increases to the Child Tax Credit could mean a lot more money for your family.
Child care tax credit: File if your family needs child care
To make child care more affordable, the new stimulus bill provides a child care tax credit for kids under age 13 — a total of up to $4,000 for one child, or $8,000 for two or more children. The credit is refundable, and available to families making less than $125,000 a year. Those making between $125,000 and $400,000 would receive a partial credit. Find out more from the IRS here.
Saver’s credit: Claim if you contribute to your IRA or retirement plan
If you’ve made eligible contributions to an IRA or an employer-sponsored retirement plan, you might be able to claim a saver’s credit. To do this, you need to be age 18 or older, not be claimed as a dependent on someone else’s return, and not be a student. The amount you can claim depends on your adjusted gross income, and will be a portion of the contributions you made. The maximum credit you can claim is $1,000 (or $2,000 if you’re married filing jointly). The IRS has a chart to help you calculate your credit.
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Credit for older adults and people with disabilities
Those age 65 and over or who are retired on permanent and total disability who received taxable disability income for the year, and fall under a certain income limit, may be eligible for this tax credit ranging from $3,750 to $7,500. Use this IRS tool to find out if you qualify for the credit for the elderly or the disabled.
Foreign tax credit: File if you paid taxes in another country
This one can get complicated, but generally, if you paid an income tax in another country or a US territory, you may be able to deduct it from your US tax return. The IRS breaks down all of the rules for the foreign tax credit here.
If you’re wondering about the different tax deductions you may be eligible for, check out our story on the 12 best tax deductions for 2021, and why you may not be able to claim the home office deduction, even if you work remotely now. Plus, find out when you might get your third stimulus check, how much stimulus money you’re eligible to receive and what we know so far about a potential fourth stimulus check.
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Source by www.cnet.com