Tax Credits Explained: How to Maximize Your Refund

Tax season can feel overwhelming, especially if you’re new to filing taxes. But here’s some good news: tax credits can reduce how much you owe or even boost your refund! Let’s break it down into simple terms and talk about four important tax credits that could put more money back in your pocket.

Earned Income Tax Credit (EITC)
Child Tax Credit
Dependents & Tax Returns
Maximizing Tax Deductions & Credits

---

Earned Income Tax Credit (EITC)

What Is It?

The Earned Income Tax Credit (EITC) is a special credit designed to help people who work and earn a lower or moderate income. It’s “refundable,” which means you can get money back even if you don’t owe any taxes.

Who Can Get It?

To qualify for the EITC, you must:

• Have a job (full-time, part-time, or even self-employed).
• Earn below certain income limits (this depends on your family size and filing status).
• File a tax return—even if your income is low and you’re not required to file.

How Much Money Are We Talking About?

The amount you can get varies. For the 2024 tax year, you could get up to $7,430 if you have three or more children and qualify.

Why Should You Care?

If you’re eligible, this credit could make a huge difference in your refund—potentially thousands of dollars!

Learn more: IRS EITC Information

---

Child Tax Credit (CTC)

What Is It?

The Child Tax Credit (CTC) helps families with children by reducing the taxes they owe. Like the EITC, it can also be partially refundable, meaning you might get money back even if you don’t owe taxes.

Who Can Get It?

You can qualify if you:

• Have a child under 17 years old who lives with you for more than half the year.
• Meet the income requirements (families with higher incomes may get a reduced credit).

How Much Can You Get?

You can claim up to $2,000 per child, and up to $1,600 of that can be refunded to you.

Why Is This Important?

The CTC is a huge benefit for families, reducing the financial burden of raising children.

Learn more: IRS Child Tax Credit Information

---

Dependents and Tax Returns

What’s a Dependent?

A dependent is someone you support financially, like:

• Your child under 19 (or under 24 if they’re a full-time student).
• A relative who lives with you and depends on your income.
  
  

Why Does This Matter?

Claiming dependents on your tax return can unlock credits like the EITC and CTC, potentially increasing your refund by thousands of dollars.

Learn more: IRS Dependents Guide

---

Maximizing Tax Deductions and Credits

What’s the Difference Between a Deduction and a Credit?

• A deduction reduces the amount of income the government can tax (e.g., childcare expenses).
• A credit directly reduces the amount of taxes you owe or increases your refund (e.g., the EITC).

Tips for Maximizing Your Savings

• Keep receipts for child care, education, and healthcare expenses.
• Check for credits you might qualify for, like the Saver’s Credit if you contribute to a retirement plan.

Learn more: IRS Credits and Deductions Overview

---

How Can Haven Neighborhood Services Help?

At Haven Neighborhood Services, we provide free tax preparation services to ensure you claim every credit you qualify for. Our IRS-certified volunteers make filing taxes stress-free and help you get the biggest refund possible.

Quick Recap:

• The Earned Income Tax Credit (EITC) can give you money back even if you owe no taxes.

• The Child Tax Credit (CTC) helps parents with up to $2,000 per child.

• Claiming dependents can unlock additional tax benefits.

• Keeping records and understanding deductions can save you money.

Ready to file? 

Book an Appointment Today!