7 ways to get more tax money in your refund


These tax credits could bring you a larger tax refund this year.

Sarah Tew/CNET

Still need to file your taxes this year? Luckily, the IRS is reportedly extending the tax deadline to mid-May instead of the usual April 15 (and you can also file for an extension if you need more time). And I’ve got more good news: This year, there are a bunch of tax credits that you may be able to claim. 

Tax credits can lower the amount of money you owe, and potentially increase your refund (you can estimate your tax refund with our calculator). The latest coronavirus stimulus package that President Joe Biden signed into law on March 11 includes some major changes to existing tax credits. Plus, if you’re still missing a first or second stimulus check, you can claim those funds on your tax return as well —  even if you don’t usually file taxes

Read more: Best tax software for 2021

Here are some of the tax credits you can claim on your taxes this year that you may not know about.

If you didn’t get all of your stimulus money: Recovery Rebate Credit 

While most people got their first and second stimulus check automatically, some did not, due to IRS errors or their status as tax non-filers (which often includes those who are retired or part of the SSI/SSDI programs). If you didn’t receive the full amount that you were owed from the first check (up to $1,200) or the second check up to $600), or were missing money for any of your dependents, you can claim that money on your 2020 tax return. This is called a Recovery Rebate Credit — here’s how to file for it. You’ll have to file a return to get this credit, even if you don’t usually file taxes

Now playing:
Watch this:

Stimulus check 3: How much money you’ll get


If you earn under a certain amount: Earned Income Tax Credit

Designed to benefit people with lower incomes, the Earned Income Tax Credit can reduce your taxable income and wages. Under the Taxpayer Certainty and Disaster Tax Relief Act of 2020, part of the December coronavirus relief package, you can use your 2019 or 2020 amount of earned income to calculate your tax credit for 2020 — a potentially important provision for people who lost their jobs during the pandemic. 

Note that if you claim this credit, the IRS may request additional information, which could result in your refund being delayed.

If you have kids: Child Tax Credit

The Child Tax Credit is designed to benefit working families by allowing them to claim a refundable credit per qualifying child. Under the new stimulus bill, the amount you can claim has gone up: Instead of the previous $2,000 per child, you can now claim $3,600 per child under age 6 and $3,000 for children over age 6. Money from the credit will be split, with half paid through your tax refund, and the other half paid monthly from July to December. (Find out more about tax credits for parents here.)

You can use this IRS tool to determine if your child or dependent will qualify for the credit. As with the Earned Income Tax Credit, claiming this credit may trigger a request for additional information, which could delay your refund.


Increases to the Child Tax Credit could mean a lot more money for your family.

Sarah Tew/CNET

If you pay for child care: Child Care Tax Credit

To make child care more affordable, the new stimulus bill provides a child-care tax credit for kids under age 13 — a total of up to $4,000 for one child, or $8,000 for two or more children. The credit is refundable, and available to families making less than $125,000 a year. Those making between $125,000 and $400,000 would receive a partial credit. Find out more from the IRS here.

If you contributed to our IRA or retirement plan: Saver’s Credit

If you’ve made eligible contributions to an IRA or an employer-sponsored retirement plan, you might be able to claim a Saver’s Credit. To do this, you need to be age 18 or older, not be claimed as a dependent on someone else’s return, and not be a student. The amount you can claim depends on your adjusted gross income, and will be a portion of the contributions you made. The maximum credit you can claim is $1,000 (or $2,000 if you’re married filing jointly). The IRS has a chart to help you calculate your credit. 

Now playing:
Watch this:

Your tax questions answered in 3 minutes


If you’re over age 65 or have a disability: Credit for the Elderly or the Disabled

Those age 65 and over or who are retired on permanent and total disability who received taxable disability income for the year, and fall under a certain income limit, may be eligible for this tax credit ranging from $3,750 to $7,500. Use this IRS tool to find out if you qualify for the Credit for the Elderly or the Disabled.  

If you paid taxes in another country: Foreign Tax Credit

This one can get complicated, but generally, if you paid an income tax in another country or a US territory, you may be able to deduct it from your US tax return. The IRS breaks down all of the rules for the Foreign Tax Credit here. 

If you’re wondering about the different tax deductions you may be eligible for, check out our story on the 12 best tax deductions for 2021, and why you may not be able to claim the home office deduction, even if you work remotely now. Plus, find out when you might get your third stimulus check, and how much stimulus money you’re eligible to receive

The editorial content on this page is based solely on objective, independent assessments by our writers and is not influenced by advertising or partnerships. It has not been provided or commissioned by any third party. However, we may receive compensation when you click on links to products or services offered by our partners.

Source link


Please enter your comment!
Please enter your name here