Tax Credits

A tax credit is an amount taxpayers claim on their tax return generally to reduce their income tax. Eligible taxpayers can use them to potentially reduce their tax liability and increase their refund.

Refundable Tax Credits: If a taxpayer's tax liability is less than the amount of a refundable credit, they can get the difference back in their refund. Some taxpayers who aren't required to file may still want to do so to claim refundable tax credits.

Nonrefundable Tax Credits: If a tax credit is nonrefundable, once a taxpayer's liability is zero, the taxpayer won't get any leftover amount back as a refund.

Did you know?

Some taxpayers who aren't required to file may still want to do so to claim refundable tax credits.



What is the Earned Income Tax Credit?

The Earned Income Tax Credit (EITC) helps low- to moderate-income workers and families get a tax break. If you qualify, you can use the credit to reduce the taxes you owe – and maybe increase your refund. You may claim the EITC if your income is low- to moderate. The amount of your credit may change if you have children, dependents are disabled or meet other criteria.


What is the Child Tax Credit?

The Child Tax Credit helps families with qualifying children get a tax break. You may be able to claim the credit even if you don't normally file a tax return. You can claim the Child Tax Credit for each qualifying child who has a Social Security number that is valid for employment in the United States.


What is an Education Tax Credit?

An education credit helps with the cost of higher education by reducing the amount of tax owed on your tax return. If the credit reduces your tax to less than zero, you may get a refund. There are two education credits available: the American opportunity tax credit (AOTC) and the lifetime learning credit (LLC). Don’t overlook these important credits.


Tips for talking about tax credits with kids

  • Elementary School: Next time you're at a town or state park, you can mention that the taxes people pay help maintain it, making it enjoyable for everyone. Similarly, walking on sidewalks or going to public school are examples of how taxes are used, things that kids can easily understand.
  • Middle School: You may choose to deduct a portion of your child’s allowance as "taxes." Allocate a percentage of each dollar they receive to a family Tax Jar. Collectively decide on a family need to allocate the money towards, fostering a sense of achievement and instilling the importance of saving.
  • High School: Introduce real-life tax documents such as pay stubs. Guide your child through understanding tax brackets, FICA, deductions, and their functions. This equips them for their initial job experiences and enables them to comprehend and complete tax forms effectively.


Additional Resources

IRS: Earned Income Tax Credit (EITC)

Up-to-date information from the IRS on the Earned Income Tax Credit, Child Tax Credit and Educational Credits.

Volunteer Income Tax Assistance (VITA) Sites

VITA offers free tax help to individuals who meet adjusted gross income requirements, persons with disabilities, and limited English-speaking taxpayers.

IRS Free File

The IRS provides free online tax preparation and filing options for individuals who meet adjusted gross income requirements.

Utah income taxes

Free tax return assistance information.

Utah Association of CPAS

Need a Certified Public Accountant (CPA) to help you with your taxes?