Tax Refund Tips: Qualifying for Earned Income and Child Credits

Filing taxes doesn't have to be overwhelming. Two of the most impactful ways to boost your refund are the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC). If you qualify, these credits can significantly lower your tax bill or even result in a larger check from the IRS.

 The Earned Income Tax Credit (EITC)

The EITC is a refundable credit designed for low-to-moderate-income workers. Because it is "refundable," you can receive money back even if you don't owe any taxes.

Do You Qualify?

To claim the EITC, you generally must:

• Have Earned Income: You must have worked for someone or run your own business.

• Meet Income Limits: Your adjusted gross income must be below specific thresholds based on your filing status and number of children.

• Have a Valid SSN: This applies to you, your spouse, and any qualifying children.

• File Correctly: You cannot use the "Married Filing Separately" status in most cases.

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The Child Tax Credit (CTC)

The CTC helps families with the cost of raising children. For the 2025/2026 tax year, this credit can be worth up to $2,000 per qualifying child.

Key Requirements

• Age: The child must be under age 17 at the end of the year.

• Relationship: The child must be your son, daughter, stepchild, foster child, sibling, or a descendant of these.

• Residency: The child must have lived with you for more than half the year.

• Dependency: You must claim the child as a dependent on your return.

Tips to Ensure a Smooth Refund

To avoid IRS delays and maximize your payout, keep these best practices in mind:

• Double-Check Information: Typos in Social Security numbers or names are the #1 cause of refund delays.

• File Electronically: E-filing with direct deposit is the fastest way to get your money.

• Keep Records: Maintain copies of pay stubs, W-2s, and records of any advance payments received.

• Check Income Thresholds: IRS limits change annually; always verify the current year’s phase-out limits before filing.

Summary

The Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) are valuable resources that can help you keep more of your hard-earned money. If you have children or a moderate income, be sure to check your eligibility for both credits. If you're unsure, consider using reputable tax software or consulting a professional to make sure you don’t miss out on any money you may be entitled to. For more information, you can contact The Center for Financial, Legal, and Tax Planning, Inc. at (618) 997-3436.