If you’ve always tried to keep your taxes as simple as possible, then the words “tax credit” probably sound really complicated to you, or maybe something that only the wealthy can use. But don’t just brush off the possibility of claiming tax credits this filing season!
There are many extremely important and useful tax credits designed specifically to help low-income households lower the taxes they pay, erase them altogether, or even get a much larger refund! This new factsheet will describe the basics of some of the most common examples of tax credits, and the ones that the largest number of people qualify for. Getting tax credits requires specifically claiming them on your tax returns – state or federal, depending on which one is offering the credit. The requirements for claiming are different for each credit, and may require you to attach additional information to your return.
However, the savings these credits can give are well worth the extra effort. For example, the Earned Income Tax Credit (EITC)requires you to include documents providing your children’s SSN, other personal information, and financial information showing that you paid for their care for most of the year, and more. But the EITC is one of the largest income tax credits available for low-income families, and can save not just hundreds, but thousands of dollars! These and other tax credits can be lifelines come tax season, and yet too many leave them unclaimed. Make sure to inform yourself on tax credits to make sure you aren’t paying any more taxes than you have to