How to Claim the $500 Tax Credit and Maximize Your Refund
As tax season rolls ahead, many Americans are searching for ways to reduce their tax bill or increase their refund. One overlooked opportunity is the Credit for Other Dependents (ODC)—a non-refundable tax credit that provides financial relief for taxpayers supporting dependents who don’t qualify for the Child Tax Credit (CTC) or the Additional Child Tax Credit (ACTC).
If you’re wondering whether you qualify for this IRS refund in 2025, here’s everything you need to know to claim it.
What Is the Credit for Other Dependents (ODC)?
The Other Dependents Credit (ODC) was introduced under the Tax Cuts and Jobs Act of 2017 to assist taxpayers with dependents who don’t meet the criteria for CTC or ACTC. This credit can provide up to $500 per qualifying dependent, helping families offset some of their tax liabilities.
Unlike the Child Tax Credit, which is partially refundable, the ODC is non-refundable—meaning it can reduce the amount of taxes you owe, but it won’t result in a refund beyond your total tax liability.
Who Qualifies for the $500 Credit in 2025?
To be eligible for the Other Dependents Credit (ODC), you must meet the following IRS requirements:
✅ The dependent must be claimed on your tax return
✅ The dependent is ineligible for the CTC or ACTC
✅ The dependent must be a U.S. citizen, U.S. national, or resident alien
✅ The dependent must have a valid:
- Social Security Number (SSN)
- Individual Taxpayer Identification Number (ITIN)
- Adoption Taxpayer Identification Number (ATIN)
✅ The identification documents must be issued before the tax filing deadline, including extensions
The ODC primarily benefits families with dependents over the age of 17, including:
🔹 Teenagers and young adults still in school
🔹 Elderly parents or relatives who rely on you for financial support
🔹 Individuals with disabilities who are dependents
Income Limits for the ODC
The Credit for Other Dependents is subject to income restrictions:
🔸 If your Adjusted Gross Income (AGI) exceeds $200,000 (or $400,000 for married couples filing jointly), the credit amount phases out.
🔸 If your income is too low, you may not be eligible for the full credit. Studies estimate that around 25% of all eligible dependents may not receive the full $500 credit due to low family income.
How to Claim the Credit for Other Dependents on Your 2025 Taxes
To claim the ODC, you’ll need to:
1️⃣ Determine if your dependent qualifies based on the IRS criteria.
2️⃣ Include the dependent’s SSN, ITIN, or ATIN on your tax return.
3️⃣ File IRS Form 1040 and complete the appropriate section for the Other Dependents Credit.
4️⃣ Ensure your income doesn’t exceed the phase-out limits to receive the full credit amount.
Why You Shouldn’t Overlook the ODC in 2025
With rising living costs, every dollar saved on taxes counts. While $500 per dependent may seem small, it can reduce your overall tax liability and help families who provide financial support for older children, aging parents, or other dependents.
If you’re filing taxes in 2025, make sure to review your dependent status to determine if you qualify for this IRS refund. Missing out on this credit could mean leaving hundreds of dollars on the table!
Final Tip: If you’re unsure whether you qualify for the ODC, consult a tax professional or use the IRS Free File tool to maximize your tax benefits.
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