04/02/2024
🚨 Weekly UPDATES 🚨
Credit amounts for children and other dependents ‼️
Last year, the amounts of the child tax credit (CTC) and earned income tax credit (EITC) returned to pre-COVID levels — meaning less money back for taxpayers.
The child tax credit remains $2,000 per child (or qualifying dependent) for the 2023 tax year and is partially refundable, which means taxpayers won’t receive the full credit if it’s larger than the tax they owe.
The other dependent care (ODC) credit is for older children and aging parents who are dependents that don’t qualify under the child tax credit. It has a maximum value of $500.
The EITC, which gives a tax break to low- and moderate-income families, has been adjusted for inflation, so there’s an increase for taxpayers. It's worth a maximum of $7,430 for families with three or more children.
Student Loans ‼️
Federal student loan borrowers who were required to continue student loan payments starting in the fall of 2023 could qualify to deduct up to $2,500 of student loan interest per tax return per tax year.
Taxpayers who had their student loans forgiven in 2023 may face tax liability ‼️
A provision of the American Rescue Plan made federal taxes on forgiven student loan debt exempt through 2025. However, borrowers may be on the hook for state taxes if their state hasn’t adopted that provision.
Arkansas, Indiana, Mississippi, North Carolina, and Wisconsin do not conform with the federal tax exemption on student loan forgiveness, so borrowers who had loans forgiven living in those states may be subject to state taxes.
