Tax Credits You’ve Probably Never Heard Of But Might Qualify For
(Daily Dig) – Filing your taxes is often frustrating. You want to make sure that you maximize your refund as much as possible–which means not overlooking any of the credits that could help boost your income for the year. Take a look at available tax credits for low-income families in 2022 as well as a few tips that can help you maximize your return.
Tax Credits for Low-Income Families in 2022
There are several tax credits to keep your eye on in 2022.
The Expanded Child Tax Credit allows parents to receive as much as $3,000 for children between 6 and 17, and $3,600 for dependents under 5. This payment is available for parents who make $75,000 or less individually, or for married couples who make $150,000 or less.
If you missed your stimulus payments, you can claim the Recovery Rebate Credit, which can help you get much-needed funds that you may not have received as each round of economic stimulus payments went out. The third round of Economic Impact Payments contained payments of up to $1,400 per person, and each household member may qualify.
The Earned Income Tax Credit offers a one-time tax break worth up to $1,500–even for workers without kids. This expanded EITC payment is available to Americans over the age of 19. It’s available to workers without kids who earned up to $21,430 in 2021. Many states are also offering Earned Income Tax Credits, so it’s important to check your state’s income tax requirements when filling out your taxes for 2022.
The Child and Dependent Care Tax Credit has been increased substantially for your 2021 taxes. This year, you can claim dependent care expenses of up to $8,000 for one child or dependent, or as much as $16,000 for two or more qualifying dependents, and you can receive up to 50% of those expenses as part of your refund. The difference in ability to claim child care costs can make an immense difference for many families.
If you made a charitable donation in 2021, you can claim up to $600 as part of your standard deduction.
Covid-related sick leave for self-employed individuals can also help decrease your tax burden. If you had to take time off to recover from Covid-19 or to care for a family member with Covid-19, or to care for children who had to be out of school due to Covid-19 closures, you may have the right to claim some of that lost time as a tax credit. Check Form 7202 for more information.
Government Programs for Low-Income Families
In addition to the tax credits you can take advantage of in 2022, there are several government programs for low-income families that can help you pay for everything from food to rent. Your tax return can help prove your income and set you up for success.
SNAP: The Supplemental Nutrition Assistance Program can help you stretch your food budget and ensure that your family is fed.
TANF: Temporary Assistance for Needy Families can provide assistance with a variety of funding challenges, including food, housing, utility bills, child care, and even job training.
CHIP: Children’s Health Insurance Program, which is for families whose income is too high for Medicaid, but too low to afford private coverage. Check out your state’s program to learn more about the specific limits and benefits.
Like many low-income families, you may be relying on your tax return to help you manage current expenses. File as early as possible to help you get a better idea of what you can expect–and to get your refund in hand sooner. With these tips, you can also take advantage of the tax credits available to low-income families, which may help increase the value of your return.
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