Child Tax Credit
The Child Tax Credit (CTC) is available for taxpayers who pay the majority of the expenses for a child under the age of 17.
To claim the credit, taxpayers must have gross income of at least $3,000; the benefit available with the credit begins to diminish after joint filers exceed $400,000 in modified gross income, and $200,000 for single filers. The maximum benefit available is $2,000 per child claimed.
Electric Vehicles Credit
This credit is a perfect example of a tax benefit being used to incentivize a particular type of behavior — in this case, eco-friendly behavior.
If you’ve purchased a qualified electric vehicle (EV) or plug-in hybrid vehicle (PHEV), you may be eligible. You can claim this credit whether you purchased an electric vehicle (car or motorcycle) for business or for personal use. This is one of the most significant tax credits, offering a maximum benefit of $7,500.
Earned Income Tax Credit
The Earned Income Tax Credit (EITC) provides a benefit for low- to middle-income earners. The benefits available depend on the specifics of the taxpayer’s financial situation. Click here to determine whether or not you qualify.
The highest benefit is available to earners with dependents; earners with three or more qualifying children can receive up to a $6,660 credit, while the maximum for those without dependents is $538.
American Opportunity Tax Credit
The American Opportunity Tax Credit (AOTC) provides tax benefits for those who incur costs for qualified educational resources during their first four years of college.
Qualified educational resources include tuition, fees, required books and supplies, and other expenses required for enrollment. Taxpayers who qualify can receive a credit of up to $2,500. The benefit will be reduced for taxpayers with an income of $80,000 for single filers, or $160,000 for joint filers.
Lifetime Learning Credit
Another education-based tax incentive, the Lifetime Learning Credit (LLC) aims to encourage learning by rewarding those seeking to broaden or improve their skill set. When someone incurs costs for undergraduate or graduate coursework, or for classes intended to improve professional skills, that person may be eligible to claim the LLC.
The LLC is worth up to $2,000 per year, per tax return, but the taxpayer must have incurred at least $10,000 in expenses to qualify. Individuals cannot exceed $68,000 in gross income ($136,000 if married filing jointly).
