FINANCE
Can you claim both EITC and Child Tax Credit?
The tax credits are available to US taxpayers when they file their tax forms this year. The deadline is fast approaching.
When you file your tax return, you expect to receive a refund. Three out of four taxpayers will receive a tax refund this year.
The amount of refund you get is determined by various factors, but one of the most reliable ways to get a refund or reduction is by qualifying for tax credits. The IRS will begin processing returns on Monday, 29 January. While processing has yet to begin, you can submit your return, putting you at the front of the queue. The IRS has stated that returns will be distributed around twenty-one days after the return is submitted if it is done so electronically and the taxpayer provides direct deposit information.
Make sure to take advantage of these credits
Two of the biggest tax credits available for families are the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC). Both are designed to support working individuals and families.
The EITC is a federal tax refund that can be fully refunded, which means that if your tax burden is reduced to $0, the IRS will pay you the difference. The credit can be worth nearly $7,000 if you meet all the requirements. Although having a family increases the amount you can claim, it is not aimed specifically at them.
The CTC is worth up to 15% of your income, up to $2,000, but it is not fully refundable. It is phased out at a much lower level compared to the EITC and is intended to help almost all working families in raising their children. Accessing one does not restrict taxpayers from claiming the other.
How to claim the EITC and the Child Tax Credit
There are a few qualifications necessary to claim the EITC:
- Having worked and earned lower income than $59,187
- Have had investment income of less than $10,300 in tax year 2022
- Have a valid Social Security number
- Be a US citizen or resident alien for the entire year
- Not filing Form 2555 (Foreign Earned Income)
To claim the CTC:
- The child must be eligible to be claimed as a dependent on the taxpayer’s return
- Live at the same residence as the taxpayer for more than half the year
- The child cannot provide more than half of their own financial support during the tax year
- The child must have a valid taxpayer identification number in the form of a work-authorized Social Security number (SSN)
Happy filing!