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A12 BUSINESS
Saturday 4 March 2023
Don’t miss these 3 tax credits when you

file this year

By ANDY ROSEN of Nerd-
Wallet
A tax credit is among the
most satisfying benefits you
can turn up when prepar-
ing your return.
Unlike a deduction, which
decreases the income on
which you'll be taxed, a tax
credit reduces your over-
all tax due. The result can
mean hundreds of dollars
knocked off your bill — or
added to your refund. Internal Revenue Service taxes forms are seen on Feb. 13, 2019.
"With a credit, you get a Associated Press
100% benefit," says Andrew have to have worked to DO YOU QUALIFY?
King, vice president of tax receive the credit. For the Families with children under
policy and research at 2022 tax year, the income 17 are generally eligible for
Goldman Sachs Ayco Per- limits range from $16,480 the child tax credit as long
sonal Financial Manage- to $59,187, depending on as their kids have valid So-
ment in Cohoes, New York. your filing status. cial Security numbers. How-
"It's a full recoupment of There are a few other re- ever, the amount you can
taxes you'd otherwise have quirements, including: — claim depends on your in-
to pay."n Some tax credits You can't have more than come. The credit begins to
apply to a huge swath of $10,300 in investment in- phase out once your adjust-
the population, while oth- come. — Everyone on your ed gross income exceeds
ers are specialized to in- tax return has to have a $200,000, or $400,000 for
centivize specific econom- valid Social Security num- those married filing jointly.
ic activity. Before you file ber. 2. CHILD TAX CREDIT At a certain income level,
your return, here are some If you've used the child tax the benefit lapses entirely.
tax credits you may want credit, or CTC, in the past, 3. AMERICAN OPPORTU-
to review. it's important to remember NITY CREDIT AND LIFETIME
1. EARNED INCOME TAX that this benefit for fami- LEARNING CREDIT
CREDIT lies with children has un- The American opportunity
The earned income tax dergone some significant credit and lifetime learning
credit, or EITC, is one of changes. credit are two education-
the most common income During the pandemic, the focused tax breaks that
tax breaks, designed to government temporarily in- help people with expenses
help lighten the burden creased the credit amount, such as tuition. Both credits
for middle- and lower- providing thousands of dol- have a similar setup, but
income families. For the lars worth of additional re- they are tailored toward
2021 tax year, 4 out of 5 fil- lief to some families. But in different types of costs.
ers claimed this tax credit, 2022, the credit reverted The partially refundable
with an average benefit to its previous levels. Tax- American opportunity
upward of $2,000. The to- payers who saw a big re- credit is also more gener-
tal value those credits was fund last year thanks to the ous: Taxpayers can claim
approximately $64 billion, credit may be disappoint- up to $2,500 per eligible stu-
the IRS said. Even better, ed when they file this time dent, including for expens-
the EITC is what is known as around. Still, the CTC can es beyond tuition, such as
a "refundable" tax credit. wipe out a considerable course materials. With the
That means if the credit chunk of your tax bill. The nonrefundable lifetime
amount is higher than your benefit can reach $2,000 learning credit, you can
tax owed, the government per qualifying child, and up claim a total of $2,000 per
will pay you the difference. to $1,500 of that is refund- tax return for tuition only,
DO YOU QUALIFY? As its able. People with depen- regardless of how many
name suggests, eligibility dents who don't qualify for students would be eligible.
for the EITC mostly depends the full credit can be eligi- You can't claim both cred-
on your income, and you ble for a credit up to $500. its for one student.q