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OLT TAX CORNER ~ Other Credits
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I am under 65 and disabled. Do I qualify for the credit for the elderly and disabled? |
If you are under age 65 at the end of the tax year, you can qualify for the credit only if you are retired on permanent and total disability. You are retired on permanent and total disability if: |
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For additional information, see IRS Publication 524. |
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How do I claim the retirement contribution credit? |
You may be able to take this credit if you, or your spouse if filing jointly, made:
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Your Adjusted Gross Income has to fall under the limit to qualify for this credit. |
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What is the Electric Vehicle Credit? What is the rate? Is there a special form to file? |
The Electric Vehicle Credit is a credit for new qualified electric vehicles placed in service during the year. The rate is 10% of the cost with a maximum credit of $2,500. This is a nonrefundable credit that should be reported using Form 8834. |
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Can you explain the adoption credit? |
You may be able to take a tax credit for qualifying expenses paid to adopt an eligible child (including a child with special needs). The adoption credit is an amount subtracted from your tax liability. |
Qualifying expenses include reasonable and necessary adoption fees, court costs, attorney fees, traveling expenses (including amounts spent for meals and lodging while away from home), and other expenses directly related to and for which the principal purpose is the legal adoption of an eligible child. An eligible child must be under 18 years old, or be physically or mentally incapable of caring for himself or herself. The adoption credit or exclusion cannot be taken for a child who is not a United States citizen or resident unless the adoption becomes final. An eligible child is a child with special needs if he or she is a United States citizen or resident and a state determines that the child cannot or should not be returned to his or her parents home and probably will not be adopted unless assistance is provided. |
The credit and exclusion for qualifying adoption expenses are each subject to a dollar limit and an income limit. |
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What does it mean if a credit is refundable? |
A refundable credit is treated as a payment of tax. For instance, you owe $500 in taxes. You receive EIC in the amount of $1,000. Since EIC is a refundable credit, you receive the full $1,000 credit. That $1,000 credit is treated as a tax payment, and so it would bring the taxes you owe to $0, and the excess, $500, would actually be refunded to you. |
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Which credits are refundable? |
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What does it mean if a credit is nonrefundable? |
A nonrefundable credit can reduce the taxes you owe to $0, but anything in excess of your taxes owed is not refunded to you. |
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Which credits are nonrefundable? |
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