The 2023 tax deadline is approaching fast. This year, there are four major tax credits that most taxpayers can enjoy and apply for: the Earned Income Tax, Child Tax Credit, Solar Tax Credit, and Electric Vehicle Tax Credit.
Millions of American taxpayers are ready to file their taxes on time to avoid penalties and enjoy some tax credits. Individuals have been receiving bigger tax refunds during the pandemic due to some states handing out help to residents to cope with pandemic effects.
According to The Sun, there will be four major tax credits this year that most taxpayers will be able to apply for: Earned Income Tax Credit, Child Tax Credit, Solar Tax Credit, and Electric Vehicle Tax Credit.
What is Earned Income Tax Credit?
Under the Earned Income Tax Credit, households and individuals earning low to moderate income are eligible to apply and will receive $600 per individual once approved. Families can get up to $3,955 for one child, $6,604 for two, and $7,430 for three or more children.
This tax credit is deducted from the taxes an individual has to pay or it could be added to the refunds at the end of the year.
What is Child Tax Credit?
The child tax credit is considered the most popular tax credit available. This known tax credit remained at $2,000 per qualifying infant.
Eligible recipients must not have an income over $200,000. For married couples jointly filing, their income should not exceed $400,000.
Several states have their own version of the child tax credit which give some lucky Americans to receive double benefits.
What is Solar Tax Credit?
This tax credit is available to those who changed their old appliances to more environmentally friendly and efficient ones. Homeowners and renters can apply for this credit and can get up to $8,000 for the purchase. It also offers a 30% payment of solar rooftop system installation costs as part of the Inflation Reduction Act.
This tax credit was made available as the US government is looking forward to a more green energy-run country in the coming years.
What is Electric Vehicle Tax Credit?
Eligible recipients of this tax credit are those taxpayers who owned an electric vehicle costing less than $55,000. They can receive as much as $7,500 if they are single filers with an income of less than $150,000. For couples jointly filing, their income should not exceed $300,000 to be eligible.
An electric van or pickup truck costing up to $80,000 can still be eligible for this tax credit.