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Do You Qualify for an Individual Tax Credit?


Tax credits are dollar-for-dollar amounts that taxpayers can claim when they submit their yearly tax returns. When eligible for a credit, taxpayers can use the amounts to lower their tax bills and even increase their refunds. Read on to learn more about individual tax credits and who is eligible to claim them.

Refundable and Nonrefundable Tax Credits 

Many tax credits are refundable, which means that if a taxpayer’s bill is less than the amount of the credit, then he or she could receive the difference between the amounts in the form of a refund. In fact, many taxpayers who aren’t actually required to file a tax return still do so in order to claim their refundable tax credits. It’s important to note, however, that not all tax credits are refundable. When a tax credit is nonrefundable and an individual’s tax debt is zero, then he or she won’t receive any leftover amounts as a refund. Whether or not a tax credit is refundable can vary by tax year, which is why it’s so important for taxpayers who have questions about whether they qualify for certain credits, to reach out to an experienced attorney when preparing their returns.

The Earned Income Tax Credit 

One of the most popular refundable tax credits is the Earned Income Tax Credit (EITC), which is claimed by as many as four out of every five moderate to low-income taxpayers. Like other tax credits, the EITC reduces the amount of tax that a person owes and could also entitle him or her to a refund. Unfortunately, many individuals don’t know that they could qualify for this benefit, including:

  • Self-employed taxpayers;
  • Recently divorced taxpayers
  • Taxpayers who receive disability pensions;
  • Grandparents who are raising their grandchildren; and
  • Veterans.

For help determining whether you are eligible for the EITC, please reach out to our legal team today.

The Child Tax Credit and the Child and Dependent Care Tax Credit 

The Child Tax Credit is also available to many taxpayers, although unlike the EITC, this credit is nonrefundable. It does, however, still lower a taxpayer’s tax debt. To qualify, taxpayers must be able to prove that their child:

  • Is a U.S. citizen under the age of 17 years old;
  • Has a Social Security Number; and
  • Was claimed as a dependent on the taxpayer’s return.

Taxpayers who pay for childcare in order to work, look for employment, or attend school full-time can reduce their taxes even further by claiming the Child and Dependent Care Credit.

The American Opportunity Tax Credit 

Taxpayers who pay qualified education expenses for certain students could also be eligible for the American Opportunity Tax Credit. Taxpayers who qualify could receive an annual credit of $2,500 per student. This credit is partially refundable. For example, if the credit lowers how much a taxpayer owes to zero, then he or she can obtain a refund of 40 percent of the remaining amount of the credit (up to $1,000).

Free One-on-One Consultations 

For help claiming tax credits on next year’s return, don’t hesitate to call CPA, former FBI Special Agent, and experienced Florida tax return preparation lawyer Ronald Cutler, P.A. at 386-490-9949 today.