"I helped Debra, a single mom with two children.
Debra had no idea that she qualified for a host of family-related credits that amounted to more than $6,000.
She started crying when she heard this."
- AccountAbility Minnesota volunteer
Know your tax credits
Tax credits mean more money in your pockets.
Our IRS-certified volunteers are trained to identify the credits you are due and deserve. We work in partnership with ClaimIt! (a community initiative) to make sure you're aware of the credits you've earned them.
Here is what you need to know.
There are two types of credits -- refundable and non-refundable. Both can help you to pay fewer taxes and receive a larger refund.
- Refundable -- you receive extra cash after the credit reduces your taxes owed to zero.
- Non-refundable -- reduces taxes owed to zero (you don't get leftover amount in cash.
Federal Credits
Earned Income Tax Credit
(EITC)
Who qualifies? Single or married people working full- or part-time in 2009. With the American Reinvestment and Recovery Act (ARRA), qualifying income levels have been raised depending upon number of children.
Amount? This refundable credit could be as much as $5,657 depending upon qualifications.
Making Work Pay
This refundable ARRA credit of $400 for individuals and $800 for couples was applied to most working individuals’ paychecks -- reduced taxes paid -- in 2009. However, not everyone saw the reduction in their paychecks and therefore will need to claim it on their return.
Who qualifies? Workers who earned too little in 2009 to have income tax withheld, self-employed workers who did not reduce amount of income tax paid in 2009 and those who did not work enough in 2009 to receive the full credit in their paychecks.
Expanded
Additional Child Tax Credit
Who qualifies? Single or married worker with a child under age 17. With ARRA, the minimum earned income has been reduced to $3,000 for the refundable portion of the credit, the Additional Child Tax Credit.
Amount? A refundable federal credit worth up to $1,000 in 2009 for each child under age 17.
American
Opportunity Credit (Expanded Hope Credit)
Who qualifies? First four years of college and eligible expenses including tuition, books and supplies needed for class.
Amount? The nonrefundable portion of the credit amount has increased to $2,500 for 2009 and 2010. New in 2009 - up to 40% of the credit may be refundable depending on the amount of taxes you owe.
Saver's Credit
Who qualifies? Taxpayers contributing to a retirement plan or IRA. Income must not exceed $27,750 if filing single or married filing separately; $41,625 if filing head of household; and $55,500 if married filing jointly.
Amount? Non-refundable credit reduces amount of income tax owed by up to 50% of a maximum $2,000 contribution to retirement plan or IRA.
First-time Homebuyer's Credit and current homeowners buying replacement homes
Who qualifies? First-time home buyers & current homeowners buying replacement homes who purchased a home on or after Jan. 1, 2009, and on or before April 30, 2010.
Amount? A refundable credit for first-time homebuyers of up to 10% of a home's purchase price, not to exceed $8,000. For current homebuyers, the credit is up to 10% of the purchase price, not to exceed $6,500.
Partial Exclusion for
Unemployment Benefits
Who qualifies? Anyone receiving unemployment benefits in 2009.
Amount? The first $2,400 of unemployment is tax free and excluded from your income.
State credits
Minnesota Working
Family Credit
This refundable credit is based on the rules for the EITC. If you qualify for EITC, you will most likely qualify for Minnesota Working Family Credit.
Minnesota K-12 Education Credit and Subtraction
Who qualifies? Families with one or more qualifying children and income less than $37,500. Maximum income to qualify increases by $2,000 for each additional child.
Amount? If you meet the income guidelines, you receive a refundable education credit of 75% of eligible expenses up to $1,000 per child. Eligible expenses include (but are not limited to): tutoring, books and materials, fees paid for lessons, computers and more. Must be able to show receipts. The education subtraction is nonrefundable and has no income restrictions.
Minnesota Property Tax Refund (aka Renter's Rebate)
Who qualifies? Renter's with a household income less than $53,030 and homeowners less than $98,290. Renters need a Certificate of Rent Paid (CRP) from landlords and homeowners need property tax statement payable in 2010.
Amount?
A refundable credit for renters of up to $1,510 and for homeowners
up to $2,350.