Some of the tax credits you may be able to claim are:
1. Foreign Tax Credit (Form 1116) To reduce the burden of double taxation, which could arise when income is earned from a foreign source and that income is taxed by both the foreign country where the income was earned and the United States, you may be eligible to claim the Foreign Tax Credit. Generally, to qualify for the Foreign Tax Credit
- Income taxes must be accrued or paid to a US possession or foreign country, or
- Taxes are accrued and paid to a US possession or foreign country in lieu of an income tax
Taxes which are refunded to you, or taxes which are paid to a country whose government is not recognized by the US, are not considered qualified foreign taxes. For more information about the Foreign Tax Credit, click here.
2. Child/Dependent Care Credit (Form 2441) The Child/Dependent Care Credit is a non-refundable credit. If, after standard or itemized deductions are applied, you have a zero tax liability (nothing is owed), you will not be eligible to receive the credit. If the filing status for your return is Married Filing Joint, both the taxpayer and spouse must have earned income be eligible for the Child/Dependent Care Credit. For more information about the Child Care Credit, please click here.
3. Education Credits (Form 8863) Generally, you may claim education expenses that are required for enrollment or attendance at any college. These are usually tuition, fees, and certain related expenses required for enrollment or attendance at any college, vocational school, or other post-secondary (after high-school) educational institution that is eligible to participate in the student aid programs administered by the Department of Education. For more information about different Education Credits, please click here
4. Retirement Savings Credit (Form 8880) You may be able to claim the Retirement Savings Credit if you, the taxpayer, and your spouse (if filing jointly), make eligible contributions to a(n):
- Traditional or ROTH IRA
- Elective deferrals to a 401(k), 403(b), governmental 457, SEP, or SIMPLE plan
- Voluntary employee contributions to a qualified retirement plan as defined in section 4974(c) (including the federal Thrift Savings Plan)
- Contributions to a 501(c)(18)(D) plan or
- Contributions to an ABLE account by the designated beneficiary, as defined in section 529A.
To be eligible for the Retirement Savings Contributions Credit, you must
- Be at least 18
- Not a full-time student
- Not a dependent on another person’s return
- Have an Adjusted Gross Income of less than
- $66,000 for Married Filing Joint
- $49,500 for Head of Household
- $33,000 for Single, married filing separately, or qualifying widow(er)
For additional information, please see Form 8880 and instructions, click here.
5. Adoption Credit (Form 8839) You may be able to take a credit for qualifying expenses paid to adopt an eligible child (including a child with special needs). The credit may be up to $14,440 per child. If your qualified expenses are less than $14,440, you can only claim the amount of the expenses unless the adoptive child is a special needs child, then you can claim the full $14,440. The credit is subtracted from your tax liability, if you qualify. If you have any expense reimbursed, such as by an employer, those expenses are not eligible for the credit. Reasonable and necessary adoption fees, attorney fees, court costs, traveling expenses, and other expenses directly related to and for the principal purpose of a legal adoption of an eligible child.
If you have no tax liability (nothing owed), you will not benefit from the credit. You should still claim the credit so you be able to carryforward the credit to future years in case your tax situation changes. You can carryforward the credit for five years from the first year you were able to claim the credit. For more information, please see the instructions for Form 8839 on the IRS website click here.
6. DC First-Time Homebuyers Credit (Form 8859) You may be able to claim a one-time tax credit of up to $5,000 ($2,500 if married filing separately) if you buy a main home in the District of Columbia. You must reduce the basis of your home by the amount of the credit you claim. Only purchases after August 4, 1997 qualify for this credit. The credit is not allowed if you acquired your home from certain related persons or by gift or inheritance. This credit is no longer available after 2016. There is a carryforward option, if you have claimed this credit in previous years and not used the entire credit.
7. Child Tax Credit In many cases, you can receive a credit of up to $3,600 per dependent listed on your return who is under the age of 18. Our program will automatically calculate this credit for you based on the dependents and other information you enter into your return. Beginning in tax year 2021, the credit is allowed for dependents listed on your return who are over the age of 18. The credit for those over the age of 18 is $500 per dependent. For more information on this credit, click here.