The Complete List of Tax Credits for Individuals

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It is tax season, meaning you can now file your 2019 tax return. In order to save money and increase your tax refund, it is important to know about the various federal tax credits available to U.S. taxpayers filing their federal income tax return. Below, I will detail by group the federal tax credits available to use on your 2019 tax return to reduce the amount of taxes due and increase your 2019 tax return refund!

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What is a tax credit?

A tax credit a tax break for qualified taxpayers that reduces dollar for dollar the amount of tax you owe. Therefore, tax credits have a more significant impact on your tax liability than tax deductions. Tax credits directly decrease your tax liability, resulting in a higher tax refund.

What are the two categories of tax credits?

The two types of federal tax credits include: nonrefundable tax credits and refundable tax credits. A nonrefundable tax credit means you can only offset taxes to the amount you owe. This means you will only get a tax refund to the amount of tax you owe for the tax year. On the contrary, a refundable tax credit means you can offset taxes greater than the amount you owe. This means you can get a tax refund larger than the amount of taxes you owe for the year.

Tax Credits for Individuals

Here is a complete list of tax credits that you may qualify for on your 2019 individual income tax return. The high-level description of the tax credits should help you determine if you need to further research the specific requirements to qualify for the tax credit on your 2019 tax return.

Family and Dependent Tax Credits

Earned Income Tax Credit
The Earned Income Tax Credit applies to working people at low to medium income levels. By working people, the IRS means that you must have earned income during the year by working for someone or from owning your own business. Investment income does not qualify as earned income. If you meet the personal and income requirements, you can claim the Earned Income Credit on your tax return. 

Child and Dependent Care Tax Credit
The Child and Dependent Care Tax Credit applies to those with qualifying persons and child/dependent care expenses. The qualifying person includes a child under 13, an incapacitated spouse/parent, and other dependents. Additionally, the expenses eligible for the deduction must be care expenses in order for you to work. If you meet the requirements, you can claim the Child and Dependent Care Tax Credit on your tax return.

Adoption Tax Credit
The Adoption Tax Credit applies to those with eligible adoption-related expenses for the tax year. Reasonable and necessary expenses directly related to the adoption process may result in a tax credit. If you meet the requirements, you can claim the Adoption Credit on your tax return.

Child Tax Credit
The Child Tax Credit applies to those who provided support and housing to a qualifying child during the tax year. If you meet the requirements, you can claim the Child Tax Credit on your tax return.

Income and Savings Tax Credits

Earned Income Tax Credit
*Same as above*

Saver's Tax Credit

The Retirement Savings Contribution Tax Credit applies to those who made eligible contributions to their IRAs or employee-sponsored retirement plans during the year. Taxpayers are able to claim a tax credit for a certain percentage of  those retirement contributions. The Saver's Credit does have an AGI phase-out and other taxpayer-specific requirements. If you qualify, claim the Retirement Savings Contribution Tax Credit on your tax return! 

Foreign Tax Credit

The Foreign Tax Credit applies to those who paid or accrued foreign taxes during the year. You can claim the credit if a foreign country (or U.S. possession) imposed local eligible taxes on you during the year. If you qualify, claim the Foreign Tax Credit on your tax return!

Homeowner Tax Credits

Residential Energy Tax Credits
Residential Energy Tax Credits include: the non-business energy property tax credit and the residential energy efficient property tax credit. The credits apply to those who made qualified energy efficiency improvements during the year by purchasing equipment and materials that meet the standards of the Department of Energy. For example, qualified purchases include home insulation improvements, electric heat pumps, and solar panels. If you made improvements during the year, determine if those energy efficiency improvements qualify for the residential energy tax credits.  

Healthcare Tax Credits

Premium Tax Credit
The Premium Tax Credit applies to those who purchase their health insurance through the Health Insurance Marketplace during the year. It suppose to help eligible taxpayers pay for the premiums of the purchased health insurance. If you meet the requirements, claim the Premium Tax Credit on your tax return!

Health Coverage Tax Credit
Similar to the PTC, the Health Coverage Tax Credit helps eligible taxpayers pay for the costs of health insurance. If you have a qualified health plan for the HCTC, you can receive the tax credit. If you meet the requirements, claim the Health Coverage Tax Credit on your tax return. 

Education Tax Credits

The American Opportunity Tax Credit applies to those with qualified higher education expenses during the year. The tax credit applies to your first four years of higher education. If you or a dependent attended school full-time during the year, you may qualify for the American Opportunity Tax Credit.

* Follow the link to find out everything you need to know about the American opportunity tax credit.
Like the AOTC, the Lifetime Learning Tax Credit applies to those with qualified higher education expenses during the year. Unlike the AOTC, the LLC is less restrictive, applying to undergraduate, graduate, and professional degree courses.Additionally, the LLC does not limit the amount of years you can claim the tax credit. If you qualify, claim the Lifetime Learning Tax Credit on your tax return!

* Follow the link to find out everything you need to know about the Lifetime learning tax credit.

The federal tax credits available to taxpayers represent a major tax savings opportunity. Taxpayers should know and understand the tax credits discussed above to save money and increase their 2019 tax refund. Please share the list of individual tax credits with others to help them learn which tax credits they qualify for to lower taxes and increase tax refunds. Additionally, please comment below or connect with me on social media if you have any questions relating to the tax credits discussed above.

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