Don’t Qualify for the Child Tax Credit? See If Credit for Other Dependents Applies to You
With the tax filing season officially underway, Americans may be looking to claim as many credits and deductions as they legally can to reduce their tax bills. If you have older adults living with you, including disabled adults or retired parents or grandparents, you might be able to claim them as a dependent on your taxes and receive a non-refundable credit via the credit for other dependents (ODC).
Who Is a Dependent as Applicable to the ODC?
A dependent — for the purposes of the ODC — is a person claimed as a dependent on your return, cannot be used concurrently to claim the child tax credit (CTC) or additional child tax credit (ACTC), and must be a U.S. citizen, U.S. national, or U.S. resident alien. This generally excludes most minor dependents, given their usual applicability under the CTC or ACTC, but exceptions do apply in certain circumstances.
Who Qualifies for the Credit for Other Dependents?
If you have a dependent living in your household who is a U.S. citizen, national, or resident alien with a social security or tax I.D. number — and that dependant has not been part of a CTC or ATC tax credit claim — you may be able to claim a $500 non-refundable ODC tax credit. Non-refundable credits can be used to reduce your tax bill, but you won’t receive any funds left over as a tax refund.
The credit begins to phase out at $200,000 in household income for married couples, filing jointly, and is completely eliminated at $400,000.
What Else Do You Need to Know?
Do not confuse the credit for other dependents of $500 with the child and dependent care credit, which enables you to receive a tax credit of up to $8,000 for one dependent — or $16,000 for two dependents — to pay for care that “assure[s] the individual’s well-being and protection” while you work or look for work, according to the IRS. You can claim this credit separately from the ODC.
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