US citizens with under $12,550 income are exempt from filing tax returns. Nonetheless, it is beneficial to file because the IRS may refund overpaid taxes or tax credits. You may also receive your 3rd stimulus payment.
Note these 6 credits that may be refunded.
1: Earned Income Tax Credit Under Stimulus Check
EITC is worth almost $6,728 and may be received by moderate and low-income workers. This amount depends on the number of dependents but people without children will get only $1,502.
The AGI must be less than a specific amount to qualify for this tax credit. To know about all the eligibility rules, you must check thoroughly and then claim the credit under the stimulus check.
2: Child Credit
Rescue Plan for Americans initiated an annual CTC that was increased to $3,600 from $2,000 for dependents below 6 to 18. AGI threshold is applicable from $220,000 to $440,000.
3: Recovery Rebate Credit
Most US citizens received 3 stimulus checks. The 3rd was worth $1,400 and many are still eligible for it.
4: Dependent and child care credit
Expenses related to dependent/child with disabilities, after-school programs, and day-care/babysitters will be covered under this credit. The maximum amount for 1 person is $8,000 and for 2 or more it’s $16,000.
5: American opportunity
College expenses worth $2,500 is refundable under this credit. Eligible students can be registered throughout the tax year at any point. Form 8863 must be attached to Form 1040 or 1040A.
6: Premium Tax Credit
Americans with 100% to 400% income under the central poverty line will get reimbursement on their monthly expenses premium. This will be allotted via Health Insurance Marketplace. Central poverty eligibility amount is more than the minimum required amount but it becomes 133% after receiving unemployment compensation.