IRS March Deposits Update – Here’s Exactly When You Can Expect Your Payment to Arrive

Tax season is upon us, and millions of American families are eagerly awaiting tax refunds, rebates, and credits to provide that extra financial cushion. While most taxpayers are familiar with their Social Security payments and the standard tax deduction, the IRS has provided a few additional credits to lower your tax liability, and potentially increase your refund amount, such as the Child Tax Credit (CTC), the Additional Child Tax Credit (ACTC), and the Other Dependents Credit (ODC),among others.

If you do not meet the qualifications for the CTC or ACTC, you may still be eligible for the Other Dependents Credit or the Earned Income Tax Credit (EITC).  Knowing what they are and how to claim them can be beneficial to your tax refund this year. 

Child Tax Credit (CTC) 

The Child Tax Credit (CTC) is an incredible tax advantage for families with dependent children. It was included in the tax code to ease the financial burden created by having children while providing extra support to struggling low and middle-income families.  To receive the CTC, families must meet established income and eligibility guidelines that specify:

For single filers, income must be below $200,000For married filing jointly, income must be below $400,000 For the tax year of 2023, the CTC is available for at least $2,000 per qualifying child, and can refund up to $1,700 of this amount. 

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To be a qualifying child, the dependent has to: 

• Be under 17 years old at the end of the tax year.
• Be a U.S. citizen, national, or resident alien.
• Have a valid Social Security Number (SSN).
• Be fully dependent on the taxpayer for financial support.

It is noteworthy that the increases made to the Child Tax Credit during the pandemic, which allowed families who were eligible to receive up to $3,600 per child is back to the pre-pandemic levels. Lawmakers may again consider expanding the tax credit in 2024. However, the Child Tax Credit is currently at the standard $2,000 per child.
Eligible taxpayers who file their returns accurately can expect to receive their refunds within 21 days, provided there are no issues such as IRS audits or incorrect claims.

Additional Child Tax Credit (ACTC)

If you’re eligible for the Child Tax Credit but don’t have enough tax liability to take the full credit, you may be able to receive the Additional Child Tax Credit (ACTC). The ACTC allows families to receive a refundable amount of the CTC – up to $1,700 per child. To receive the refundable portion, taxpayers have to have at least $2,500 of earned income. The IRS will calculate whether you qualify for the ACTC when it processes the tax return.

Other Dependents Credit (ODC)

For taxpayers who do not qualify for the CTC or ACTC, the IRS offers the Other Dependents Credit (ODC). This credit provides up to $500 per qualifying dependent who does not meet the criteria for the Child Tax Credit.

Dependents who may qualify for the ODC include:

• Dependent children who are over 17 years old.
• Elderly parents or relatives who rely on you for financial support.

Children who do not have a valid Social Security Number but have an Individual Taxpayer Identification Number (ITIN) or Adoption Taxpayer Identification Number (ATIN).

Like the CTC, the ODC is subject to income limits:

• Single filers earning less than $200,000.
• Married couples filing jointly earning less than $400,000.

While the ODC is not refundable, it can reduce overall tax liability and provide significant savings for families supporting dependents.

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Earned Income Tax Credit (EITC)

Another key tax credit available this tax season is the Earned Income Tax Credit (EITC). Designed to assist low- and moderate-income workers, the EITC reduces tax liability and can result in significant refunds.
The eligibility criteria for the EITC vary depending on the number of qualifying children and total earned income.

The maximum income thresholds for 2023 are as follows:

Contrary to most other tax credits, the EITC is fully refundable, so you can get a refund check from the IRS even if you owe no taxes. The EITC can be claimed retroactively for up to three years if you didn’t claim it when eligible. For example, taxpayers can claim the EITC until April 15, 2025, for the 2021 tax year.
Don’t Forget to File

Filing a tax return is particularly important even if your income is below the taxable threshold. Many credits (i.e., the EITC and CTC) require a tax return to be filed before you can obtain any refunds. The IRS often issues refunds within 21 days, though potential errors in the return may cause delays.

To ensure a smooth tax filing process:

• Double-check all income documents (W-2s, 1099s, etc.).
• Verify Social Security Numbers and other identifying information.
• Use tax preparation software or consult a professional if you are unsure about your eligibility for tax credits.

Conclusion

You can receive significant benefit from credits such as the CTC, ACTC, ODC, and EITC to maximize your tax benefits. As a parent, you may be eligible for the CTC, if you are taking care of a senior relative, the ACTC can help, and if you qualify as a low-income worker, you will want to review the EITC and the ODC.

Each of these credits can make a considerable difference to your refund if they pass through the necessary review process on your tax return. Be sure to think through your specific tax situation, and take advantage of every credit available to you for a successful tax season.

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