The federal government gives away billions of dollars in tax credits each year, most of them targeted toward low- and middle-income families. Even if you don't owe taxes and have not had income taxes withheld from your paycheck, you may be able to get a refund check by claiming some of these credits. You are most likely to qualify for these credits if you work and have children, you adopted a child, or you pay college expenses.
Earned Income Credit
The Earned Income Credit rewards families and individuals who work. The amount of the credit depends on your income level and the number of children you claim on your tax return. Families with three or more children can get up to $5,891 for the 2012 tax year. Even if you have no children, you may be able to get up to $475 using the credit. Generally, couples who make more than $50,000 per year cannot claim the credit.
Additional Child Tax Credit
If you have children, you may be able to increase your refund by claiming the Additional Child Tax Credit. This credit is similar to the Child Tax Credit, but instead of just decreasing your taxes it can actually result in you getting money. The maximum credit is $1,000 per child. Couples who earn less than $110,000 or individuals who earn less than $75,000 can apply for this credit.
If you have out-of-pocket expenses for adopting a child, you can receive a credit of up to $13,360 (as of the 2011 tax year.) Eligible expenses include adoption costs, court costs, attorney fees and certain travel expenses. If you adopted a special needs child, you can get the full amount. Also, if you had adoption expenses in the past that you couldn't use on your income tax return, new rules may allow you to get a refund of those amounts. Your adjusted gross income must be less than $225,210 to qualify for the credit.
American Opportunity Credit
If you, your spouse or dependent attends an accredited college, university or vocational program you may be able to get a refund of some out-of-pocket expenses. The American Opportunity Tax Credit provides up to $2,500 in total tax credits per student for the first four years of education in a degree program. Forty percent of the credit, up to $1,000, can be in the form of a cash refund. The rest can be applied only toward taxes you owe. Couples who earn less than $180,000 or individuals who earn less than $90,000 can apply for this credit.
Note, however, that as of the date of publication the American Opportunity Tax Credit is scheduled to expire on Dec. 31, 2012.
- Internal Revenue Service: EITC Home Page -- It’s easier Than Ever to Find Out If You Qualify for EITC
- Internal Revenue Service: Preview of 2012 EITC Income Limits, Maximum Credit Amounts and Tax Law Updates
- Internal Revenue Service: Publication 972, Child Tax Credit
- Internal Revenue Service: Adoption Benefits FAQs
- Internal Revenue Service: Publication 970, Tax Benefits for Education
- Internal Revenue Service: American Opportunity Tax Credit
Alan Sembera began writing for local newspapers in Texas and Louisiana. His professional career includes stints as a computer tech, information editor and income tax preparer. Sembera now writes full time about business and technology. He holds a Bachelor of Arts in journalism from Texas A&M University.