Earned Income Tax Credit (EITC)
The most notable, noteworthy, and noted
This is the biggest tax credit for working families — the third-largest social welfare program in the United States. EITC pulls almost 10 million working people who have low to moderate income out of poverty.
“If you work 40 hours a week, 52 weeks a year, in the richest nation in the world, you should not have to live in poverty.” — late Senator Edward Kennedy
For millions of families, EITC makes that possible. More money in your pocket, EITC reduces your taxes and may also give you a refund. If you have children and make less than $50,000, you might qualify — probably qualify.
Child Tax Credit
For the kids
Another important tax credit, the Child Tax Credit can be worth as much as $1,000 per qualifying child depending upon your income.
Credit for child and dependent care expenses
For child care
If you paid someone to care for your child, spouse, or dependent last year, you may be able to claim the Child and Dependent Care Credit on your federal income tax return. Below are 10 things the IRS wants you to know about claiming a credit for child and dependent care expenses.
Retirement Savings Contributions Credit
For your future
Are you saving for your retirement? Why not? You could missing out on free money in the form of tax credits. The Retirement Savings Contributions Credit may be able to reduce your taxes for making eligible contributions to your IRA or employer-sponsored retirement plan.
American Opportunity credit or lifetime learning credit
(these are education credits and people can only claim one)
The American opportunity tax credit (AOTC)
Considering university? But you wonder how we can afford to take classes with rents rising and expenses growing. AOTC might lighten that load. It is a credit for expenses paid for an eligible student for the first four years of higher education. It has a maximum annual credit of $2,500 per eligible student.
lifetime learning credit
Considering university again? For any given tax year, you might be able claim a lifetime learning credit for your education expenses. Unlike AOTC, you can claim this credit for an unlimited number of years.
Circuit Breaker Credit
(this is MA only for people 65 or older — get this instead of EITC based on housing costs)
If you are older than 65 and own or rent residential property located in Massachusetts, you’re allowed a credit to help cover your taxes or the amount of your rent that would go to taxes. The amount has limitation based on your income. But the category of people that own or rent includes most people, so check this one out.
VITA: FREE TAX PREP
Volunteer Income Tax Assistance
Just because you know that there are options, doesn’t mean you can navigate the US tax system. That’s where VITA (Volunteer Income Tax Assistance) comes in. If you have low- or moderate income and you live in the Boston Metro area, call the Neighborhood Developers:
Make and Appointment:
617.884.8406 x 126
Make an appointment for free tax prep from our skilled tax assistants. If you don’t live in the metro area, search for VITA in your area. It’s a national program!