Especially this year, it’s more important than ever to pay special attention to how you report your taxes; as a result of last year’s stimulus law, you may be eligible for credits and discounts you are not normally entitled to. These special credits are available to you even if you receive Social Security Supplementary Income and / or do not earn enough money to file a tax return – or simply do not submit one.
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Here are the two major credits you need to take care of this tax application season if you are receiving SSI or Social Security benefits.
The child tax deduction
As part of the stimulus relief bill, the child tax deduction was extended to $ 3,600 per month. eligible children under the age of six and $ 3,000 per eligible children aged 6-17 years. Advance monthly installments comprising half of this credit began to go out to families in July 2021 and were paid out through December 2021, with the other half of the credit available now, during the tax filing period. If you did not claim this credit last year, do not be annoyed – you can simply claim it now, although it can be called a discount credit depending on what you claimed last year.
Your child tax deduction payments will not affect your Social Security benefits, the Social Security Administration noted in a blog post. If you receive SSI, any child tax deduction you receive, including prepayments received in 2021, will not count as income or resources for 12 months after you receive it when you consider SSI income eligibility. This suggests that SSA wants to see that you needed the money and not just keep it in a bank account.
Earned income tax deduction
The EITC provides low- to moderate-income workers and families with certain program-specific tax breaks. You can use the credit to reduce the taxes you owe the IRS, which in turn can increase your overall tax refund. Like CTC, EITC is determined by your income and the number of eligible relatives.
You can still receive EITC if you receive Social Security or SSI, as long as you meet the rules of the EITC program. Sometimes, if you have a child with a disability, you can claim the EITC.
Social benefits and SSI do not affect one’s eligibility for the EITC. Your disability insurance or SSI payments can be counted as earned income for the EITC, but it will depend on a number of factors. To claim the EITC, the first step is to ensure that you file a 2021 tax return.
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This article was originally published on GOBankingRates.com: Social Security: Beneficiaries should know about these two credits in this tax season