Tax time for many families will be the largest influx of cash they will have each year. Parents should be on the lookout for five federal tax credits:
Child Tax Credit (CTC)
Parents can receive a CTC for dependent children who are under the age of 17 as of the last day of the year (December 31, 2022). Each child claimed for the CTC will need to have a social security number. The CTC can refund up to $1,500 to you. Unlike on your 2021 taxes, the 2022 Child Tax Credit will require you to have earned income (aka money from work) to be refundable.
Earned Income Credit (EIC)
The Earned Income Credit is another refundable credit (the money can come back to you). It will likely be the largest portion of your refund. The EIC like the CTC requires that you have earned income (aka money from work) but it can be worth up to $3,700 for one eligible child, $6,100 for two children, and up to $6,900 for three or more eligible children.
The EIC has some additional eligibility requirements and further explanation can be found here:
Credit for Other Dependents
If you have a dependent who either is over the age of 16 or does not have a social security number, you may be able to get a nonrefundable credit. The Credit for Other Dependents is worth $500 per dependent.
Child and Dependent Care Credit (CDCC)
If you paid for child care (like day care) during 2022 you may be eligible for the Child and Dependent Care Credit. Your kids will need to be 13 or younger but this credit may be worth up to $1,000 for one eligible child and $2,100 for two or more children. This is a nonrefundable credit so it will only show up on your tax return if you owe taxes.
American Opportunity Credit
If you (your spouse) or your child are going to college for a degree you may be eligible for the American Opportunity Credit. The credit is available for the first four years of your postsecondary education. This credit can be a big benefit for families with tuition expenses. It may be worth up to $2,500 in tax credits of which $1,000 may be refundable. Learn more about the American Opportunity Credit here: https://www.irs.gov/credits-deductions/individuals/aotc