This is a popular credit. You may be eligible for $ 1,000 per child up to a total of $ 3,000 if you have children.
They should be younger than 17, and both you and your children must have Social Security numbers assigned to or before the tax date for the year. Every child should be your biological offspring, your adopted child, a foster child placed with you by a government agency, or your daughter. If he has any income himself, he can not give half or more of his own financial support during the tax year. You must claim her as your dependent and she should become a US citizen. He lived with you for at least half of the year.
Like Credit Earned Income, you will not get too much if you expect to qualify for a full $ 1,000 credit per child. Tax year number in 2017, income limits are $ 75,000 for single and head of household filers, $ 110,000 for couples together, and $ 55,000 if you are married but file a separate return. You should reduce $ 50 from your tax credit for every $ 1,000 you earn on these limits.
Child Tax Credit is not refundable
but there is a catch. If you have at least $ 3,000 in income, you may be eligible for Additional Child Tax Credit, too, who may put money in your pocket. As of 2017, this credit can be up to 15 percent of your revenue income that can be taxed over a $ 3,000 threshold. If you can claim a Supplementary Child Tax Credit, you may have at least this your original Child Tax Credit refunded to you after any tax liability you can pay is removed.
Some Popular Non-Refundable Credits
There are many refundable tax credits out there, but some are more common than others.
- If you are at least 65 years old or if you have a disability, you can get the tax credit for the elderly and the disabled, sometimes called " Senior Tax Credit ." Again, if you earn too much, you are not eligible, and the limits are quite low: only $ 17,500 in revised income if you are a single or head of the household filer. More complex calculations come into play if you have unpaid Social Security or other retirement income. This credit amount ranges from $ 3,750 to $ 7,500 to 2017.
- You may be eligible for Child Credit and Dependent Care if you pay a caregiver to guard your child or children under 13 years of age to work or find a job. You may also qualify if your spouse does not have the ability to self-care so you must pay someone to take care of him. This credit can be up to 35 percent of your health care costs that are eligible, but again, it is subject to income limits.
- There are two educational tax credits available in the 2017 tax year: the Lifetime Learning Credit and the American Credit Opportunity Tax. Each one allows you to reduce a percentage of what you pay for tuition and related expenses for you, your spouse or your dependent to pursue post-secondary education. The values of these credits also drop as the income increase is beyond their limits. The rules refer to the nature of credit-worthy tuition expenses, including some fees and mandatory expenses. You can claim one of the credits or the other, but not the same.
Proceed with Precautions
Credits are just the tip of the iceberg and the rules provided here are only summaries. Be sure that you are eligible to claim tax credits or others before you actually do so. The attempt to claim a tax credit that you do not qualify may result in an IRS audit, something that no one wants to deal with. It is easy to make a disagreement because the rules for most credits are interconnected and complicated. If you have any doubts at all, you may want to check with a tax professional before you file your return.
Your AGI is left after you take some "above the line" adjustment on income but before you deduct your usual deductions or itemized deductions. And some credits that use your altered adjusted total revenue instead, although this is similar to your AGI for most taxpayers. Again, if you're not sure what your MAGI is and you need to know, check with a tax professional.