The Credit for Other Dependents: What You Need to Know

Did you know that if you’re a taxpayer with dependents who don’t qualify for the Child Tax Credit, there may be another way to get your taxes reduced? It’s true! Taxpayers can claim the Credit for Other Dependents on their 2022 tax return. This credit could reduce the amount of taxes owed and even result in a refund. Let’s take a look at what this credit entails and when it can be used.

When is the Credit Eligible?

The Credit for Other Dependents is available to taxpayers with dependents who don’t qualify for the Child Tax Credit. This includes dependent parents or other qualifying relatives, as well as dependents living with the taxpayer who aren't related to them by blood or marriage. The dependent must have either a Social Security number (SSN) or an individual taxpayer identification number (ITIN). In addition, these dependents must meet certain conditions in order to receive the credit.

Qualifying Conditions

In order for someone to qualify as an eligible dependent under this credit, they must meet certain conditions set out by the IRS. These include being any age (including 18 years old or older), living with the taxpayer for more than half of the year, not providing more than half of their own support during the year, not being claimed as a qualifying child of another taxpayer on their tax return and having either an SSN or ITIN from the IRS.

How Much Can I Claim?

The maximum amount of this credit is $500 per eligible dependent. Even better, taxpayers claiming this credit in addition to the Child and Dependent Care Credit and Earned Income Credit could potentially increase their refund or reduce their tax bill further. However, it should be noted that this credit begins to phase out when household income reaches $200,000 ($400,000 if married filing jointly).

The Credit for Other Dependents is a great way to reduce your tax bill—or get even bigger refunds—if you have dependents who don't qualify for other credits like the Child Tax Credit. But keep in mind that there are specific qualifications and conditions which must be met before you can claim it on your 2022 tax return. Be sure to research all of your options thoroughly before making any decisions so you can maximize your tax savings! If you are in doubt don't hesitate to reach out to a professional at Supreme Financial Group we offer all of our customers FREE Tax Estimates so they can make sure they are maximizing their returns with no upfront cost or obligation to file. Use the link below to sign up and we will make sure you receive maximized savings this tax season!