As the economic fallout from the coronavirus pandemic continues to take its toll on taxpayers, many are struggling to make ends meet. With unemployment rates at record highs and wages stagnant, many taxpayers are finding it difficult to pay their taxes. Fortunately, the government has implemented a number of tax credits that could provide much-needed relief for struggling taxpayers.
The Earned Income Tax Credit (EITC) is one of the most popular tax credits available to taxpayers. The EITC is a refundable tax credit that is designed to help low- and moderate-income taxpayers. The amount of the credit is based on the taxpayer’s income and filing status. The credit can be as much as $6,660 for taxpayers with three or more qualifying children.
The Child Tax Credit (CTC) is another popular tax credit that can provide relief to taxpayers with children. The CTC is a refundable tax credit that is available to taxpayers with qualifying children under the age of 17. The amount of the credit is based on the taxpayer’s income and filing status. The credit can be as much as $2,000 per qualifying child.
The American Opportunity Tax Credit (AOTC) is a tax credit that is available to taxpayers who are paying for college expenses. The AOTC is a refundable tax credit that can be as much as $2,500 per eligible student. The credit is available for the first four years of post-secondary education and can be used to cover tuition, fees, and other related expenses.
Finally, the Retirement Savings Contributions Credit (Saver’s Credit) is a tax credit that is available to taxpayers who are making contributions to a retirement savings plan. The Saver’s Credit is a non-refundable tax credit that can be as much as $2,000 for taxpayers who are making contributions to a qualified retirement plan.
Tax credits can provide much-needed relief for struggling taxpayers. By taking advantage of these credits, taxpayers can reduce their tax liability and potentially receive a refund. It is important to note that the credits are subject to income limits and other restrictions, so taxpayers should consult with a tax professional to determine if they are eligible for any of these credits.