With the IRS tax season coming in a month, people must check the tax credits they qualify to reduce their tax bill and get higher refunds. The IRS has many tax credits, such as the Child Tax Credit, EITC, and ACTC to support the citizens and give them tax breaks.
Taxpayers who wish to claim CTC, but find out their dependents do not qualify for the CTC should know that the IRS has tax credits of up to $500 for other dependents too. The US people wondering about the other dependents’ credits can check the full details here.
$500 Credit for Other Dependents
The US government offers tax credits to help citizens reduce their tax bill and qualify for a tax break. The Child Tax credit is one of them that allows parents or guardians to get some credit for dependent qualifying children and get the needed support to cope with the rising cost of raising a child.
However, if some people have dependent children who do not qualify for the child tax credit at the end of the tax year for which you wish to claim the tax credit, you can claim the other dependents’ credit and get the needed support.
The credit for other dependents came into the picture with the 2017 Tax cuts and the Job Act and it will expire with TCJA in 2025. Under the other dependents credit, the claimants can receive a credit of up to $500 for each child depending on the condition you met.
For whom the $500 Other Dependents credits can be claimed?
According to the IRS rules, the $500 credit for other dependents can be claimed for dependents who meet the following conditions:
- For the dependent child of any age, there are no age restrictions, so you can claim the credit for a child aged over 18 or above.
- Dependent must have an Individual Taxpayer Identification Number or Social Security Number;
- Taxpayers support the children’s parents or other relatives;
- The child must be living with the taxpayer who is claiming the credit for them for more than half a year.
- The dependents do not qualify for the CTC and applied for the credit in any other taxpayer claim.
Who can receive the $500 other dependents Credit?
According to the IRS rules, US citizens who wish to claim the $500 non-refundable credit for other dependents, must meet the following conditions:
- You must claim the child you are applying for as a dependent in your federal tax return,
- You have not used the dependent to claim the additional child tax credit or child tax credit,
- The child for whom you care claiming should be a US resident, US citizen or national, or resident alien.
- The child should be living with you and you provide more than half of the financial support to them,
People living in the US can use the IRS tool Does my Child/ Dependent qualify for Credit for other dependents or Child Tax credit on the official website of the IRS to know their eligibility for the other dependent credit claim?
How does your income affect your $500 credit?
According to IRS rules, the maximum amount under the credit for other dependents is $500, however, if the claimants earn more than the income threshold the amount will be reduced. The income threshold for the Other dependent credit that will phase out the amount is as follows:
- Income for individuals $200,000
- For married couples filing tax returns jointly $400,000
Your credit for other dependents is reduced by $50 for every $1000 you earn above the income threshold based on your filing status. The taxpayers can figure out their other dependent credit amount, you can use Form 1040 Schedule 8812 and its instructions to see the amount you will receive under the other dependent credit.
How to claim the $500 Other Dependents Credit?
Taxpayers who wish to claim the Credit for other dependents should first figure out their tax credits with tax form 1040 Schedule 8812 Part I instructions. The taxpayers who are eligible for the Other dependent credit can claim the credit with their federal income tax return.
Taxpayers should prepare the following supporting documents and forms to claim the other dependent credits:
- Your & your spouse’s (if any) Social Security Number and the dependent SSN or ITIN
- Form 2441 where you report the child and dependent care expenses,
- Form W-2 if you receive the dependent care benefits from your employment,
- Dependent date of birth evidence
You must file the claim through form 1040 or 1040-Sr (senior citizen) and file the tax return before the tax deadline. Taxpayers should understand they can file their tax return through the following ways:
- IRS Direct File or Free File: You can directly file the IRS tax return through Direct file, it will be a convenient and fastest service to file your tax return, or if meet certain conditions you can use the IRS Free file. IRS Free File allows you to file taxes to prepare for taxes on the IRS partner’s website for free.
- You can file taxes through the mail by downloading Form 1040, filling the form with valid information, and mailing the form to the IRS.
Taxpayers should know the tax refund with credits may take time to process due to the PATH Act, so once you file the tax return you may need to wait for the tax refund. The taxpayers are advised to file the tax return electronically to process the tax returns easily.
The IRS will soon announce the 2025 tax season, so taxpayers should start preparing for the taxes to file the taxes with appropriate deductions and credits and complete their tax responsibility.