Parents should be on the lookout for five federal tax credits:
- Child Tax Credit (CTC) - This credit is for dependent children who are under 17 years old. The CTC can refund up to $1,500 to you. For 2022 it will require earned income (aka money from work) to be refundable
- Earned Income Credit (EIC)- This refundable credit will likely be the largest portion of your refund. It does require earned income (aka money from work) but can be worth up to $3,700 for one eligible child, $6,100 for two eligible children, and $6,900 for three or more eligible children.
- Credit for Other Dependents - Parents whose children are not eligible for the Child Tax Credit can get a nonrefundable $500 credit per dependent.
- Child and Dependent Care Credit - This is a nonrefundable credit to help offset the cost of child care. It may be worth up to $1,000 for 1 eligible child and $2,100 for 2 or more children.
- American Opportunity Credit - If you (or your spouse) or your child are going to undergraduate college you may be eligible for the American Opportunity Credit. This credit for educational expenses may be worth up to $2,500 of which $1,000 may be refundable.
