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Tax Credit: Families may qualify for $8,000

If you’re a family with 2 children under the age of 13, you could receive a tax credit worth $8,000.

tax return forms to submit to the IRS for tax credits spread out and printed in blue and pink ink.

The payments aren’t automatically tacked onto your refund.

You will need to file a Form 2441 with your tax return, which is the Child and Dependent Care Expenses form.

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Related: IRS: New rule gives savers $2,000 tax break

Child and dependent tax credit

To qualify, you’ll need two children under 13 and to make less than $125,000 annually.

This credit helps working families that need to pay for the costs of caring for and raising a child while they work. It counts for looking for work and finishing school as well.

Expenses that may qualify include transportation, housekeeping, babysitting, programs after school, and camps or daycare.

If you do not have a child, but a disabled dependent requiring these things, you can also claim the credit.

The credit for 2 or more kids in 2020 was $6,000, but under the American Rescue Act it’s been increased.

The maximum percentage a family can claim has risen from 35% to 50%.

Related: IRS: tax refunds coming soon, be prepared

Eligibility for the tax credit

More people qualify this year than in previous years.

Before this tax season, the income threshold was just $15,000, and now it’s $125,000.

As income rises past that point, the 50% credit is reduced to as low as 20% for those with incomes between $183,000 and $400,000.

Related: IRS: When is the 2022 tax deadline?

Anyone with an AGI of $438,000 or more will not qualify this year.

The payments are not automatically sent out, so you’ll need to file a Form 2441 with your tax return.

This can be found on the IRS website.

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