Sunday, December 20, 2015
Two Very Important Tax Credits That Help Low Income Families With Children
For once, there's good news for low-income working families. Not only that, it's coming from the Federal Government. What is it? Tax credits that put money in the pockets of low-income families.
There are two tax credits for low-income families that were about to expire in December, 2017. Fortunately, Congress has agreed to extend both the child tax credit and Earned Income Tax Credit (EITC). Now these tax benefits can continue helping those in need. Basically, both tax credits are for people who work but do not earn high incomes.
What the tax benefits mean:
#1 - Earned Income Tax Credit (EITC): According to the IRS, The American Tax Relief Act of 2012 extended the relief for married taxpayers and expanded credit for taxpayers with three or more qualifying children. This credit was to expire on December 31, 2017. If it expired, the credit would revert back to the 2009 income rules and the credits would be smaller. Extending the EITC will provide larger credits to larger families.
#2 - Child Tax Credit:This credit was also extended in 2012 to provide refundable credits to more low-income families. The refundable portion of the child tax credit is called the additional child tax credit. More low-income families received this credit after the tax law lowered the qualifying income to $3,000 or more. This, too, was to expire in December, 2017 but has now been extended.
The extension of both credits means that now more low-income families can qualify for larger credits -- good news for low-income working families!