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Tax Credits Overview

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Earned Income Tax Credit (EITC)

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A refundable tax credit for low to moderate-income working individuals and couples, particularly those with children. The amount of EITC benefit depends on a recipient's income and number of children.

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Child Tax Credit (CTC)

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A credit for parents or guardians of children under the age of 17 at the end of the tax year. The credit is subject to income limitations and provides a benefit that may reduce a taxpayer's liability or increase their refund.

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American Opportunity Tax Credit (AOTC)

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A credit for qualified education expenses paid for an eligible student for the first four years of higher education. Up to 2,500pereligiblestudentisavailable.2,500 per eligible student is available.

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Lifetime Learning Credit (LLC)

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A credit for qualified tuition and related expenses paid for eligible students enrolled in an eligible educational institution. This credit can help pay for undergraduate, graduate and professional degree courses — including courses to acquire or improve job skills.

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Saver's Credit

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Also known as the Retirement Savings Contributions Credit, this non-refundable credit is available for eligible contributions to a retirement plan or IRA. The amount of the credit is 10%, 20%, or 50% of your contribution up to 2,000(2,000 (4,000 if married filing jointly), based on your income.

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Adoption Credit

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A non-refundable credit for qualified adoption expenses paid to adopt an eligible child. The credit is subject to income limits and may cover expenses such as adoption fees, court costs, attorney fees, and travel.

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Residential Energy Credit

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Tax credit for homeowners who make energy-efficient improvements to their homes, including solar energy systems, wind turbines, and geothermal heat pumps. The credit amount varies based on the improvement.

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Foreign Tax Credit

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A credit that reduces the double tax burden for taxpayers earning income outside of the U.S. The credit is for foreign taxes paid on income that is subject to U.S. tax as well.

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Electric Vehicle Tax Credit

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A credit available for purchasers of new qualifying plug-in electric vehicles, including both fully electric and plug-in hybrid vehicles. The credit amount varies based on the battery capacity of the vehicle.

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Credit for the Elderly or the Disabled

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A credit available to taxpayers aged 65 or older, or taxpayers under 65 who are retired on permanent and total disability and have taxable disability income. Credit amount varies based on filing status, income, and disability status.

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Work Opportunity Tax Credit (WOTC)

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A credit available to employers for hiring individuals from certain target groups who have consistently faced significant barriers to employment. The groups include veterans, long-term family assistance recipients, SNAP (food stamp) recipients, and others.

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Health Coverage Tax Credit (HCTC)

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A refundable tax credit that pays 72.5% of qualified health insurance premiums for eligible individuals and their families. The credit is available only to certain groups of taxpayers, such as those receiving Trade Adjustment Assistance (TAA) benefits.

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Low Income Housing Tax Credit (LIHTC)

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A credit that incentivizes property owners and developers to create affordable housing for low-income tenants. The credit amount varies and is allocated to states based on population.

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New Markets Tax Credit (NMTC)

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A credit designed to stimulate investment in low-income communities. The NMTC provides a tax incentive for investors to re-invest their capital into community development entities.

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Empowerment Zone Employment Credit

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A credit available to employers who hire individuals to work in an Empowerment Zone. The credit is up to 3,000or203,000 or 20% of the first 15,000 in wages paid to a qualifying employee.

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