Your 2021 Tax Return: Tax Credits

Do you know what to expect when you claim different tax credits on your 2021 tax return? Individuals and families benefit from the financial boost tax credits offer to lower their tax bills or increase their refund amount. SC Thrive is excited to provide a free tax filing opportunity to qualifying South Carolinians through Thrive Hub, South Carolina’s digital social care platform.

Whether you choose to e-file or visit a tax clinic, the tax filing software will guide you through each step of claiming one or multiple tax credits. Here is a breakdown of common tax credits you can claim on your 2021 return and what you can expect this season.

Child Tax Credit

The Child Tax Credit is for qualifying tax filers with dependents. Because of their previous tax records, many families qualified to receive Advance Child Tax Credit payments in 2021. If you received advance payments, you might be eligible to claim the rest of the Child Tax Credit when you file your 2021 tax return. You should receive Letter 6419 (2021 Advance Child Tax Credit) that reports the Advance Child Tax Credit payments that were dispersed to you in 2021. You need to save Letter 6419 and use it to claim the other half of your credit on your 2021 tax return. If you claim this credit, you want to ensure the Internal Revenue Service (IRS) has your most recent personal information. Learn more details about the Child Tax Credit HERE.

To report this credit on your return, simply fill in the total amounts of advance payments received in 2021 as reported in Letter 6419.

You can update your contact information and review processed payments using the IRS Child Tax Credit Portal HERE.

Earned Income Tax Credit (EITC)

The Earned Income Tax Credit (EITC) is for qualifying individuals or families with low income. If you qualify, you can use the credit to reduce the taxes you owe or possibly increase your refund. Credit amounts dispersed vary based on tax-filing status, income, and number of children, but people without kids can also qualify for the EITC. You can learn more details about the EITC from the IRS HERE.

Recovery Rebate Credit

If you believe you have unclaimed stimulus monies, you may qualify for the Recovery Rebate Credit. You should receive Letter 6475 (Stimulus Payment), which reports your compensation for the third stimulus payment issued in 2021. You need to save this form to determine if you should claim the Recovery Rebate Credit during this tax season. 2021 Recovery Rebate Credit payments will either reduce your taxes owed or increase your refund amount. You can find stimulus payment amounts and learn more about claiming the Recovery Rebate Credit from the IRS resource HERE.

If your Adjusted Gross Income (AGI) is $73,000 or less per year, you may qualify for free tax filing with SC Thrive. Be sure to have all your documents together to avoid delays or amendments.

You can claim the Child Tax Credit, Earned Income Tax Credit, and the Recovery Rebate Credit at no extra cost when you file your taxes through Thrive Hub. Get started on your 2021 return today HERE.