The Child Tax Credit can save parents up to $1,000 per child based on income. Higher income families are entitled to a smaller credit, as the IRS reduces the credit at modified adjusted gross income of $110,000 for joint, married taxpayers.
The Child and Dependent Care Credit is an excellent way to recover some expenses incurred for qualified supervision of your dependents while you work an earn a living. This credit covers a certain percentage of a maximum of $3,000 in expenses such as daycare fees for a single qualified person’s care, and up to $6,000 for the care of two or more people. Qualified dependents include children under the age of 13, a spouse or parent who is unable to care for themselves, and certain other dependents. Determined by your income, the percentage ranges between 20% and 35%. Quick breakdown: Filers with AGI of $15,000 or less are entitled to a credit covering 35% of their expenses. Every additional $2,000 of AGI decreases the credit percentage by one, meaning those who have an AGI of over $43,000 are able to claim a 20% expense credit. If you paid the expenses with a specific flexible spending account or advantageous tax program through your work, your credit may be smaller.
The Earned Income Tax Credit can save you between $3,468 and $6,444 in 2017, and is related to the size of your family, including children and dependents, your income, and your marital status. Families with an AGI of less than $55,000 should seriously consider their eligibility for the credit. However, investment income and other factors affect qualifying for the credit – in 2017 you have to have less than $3,500 in investment income, dividends or capital gains. If you don’t have children, you may still be entitled to up to $520 from this credit if you file Single and have an income less than $15,310 in 2017 or jointly at $21,000.