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IRS Spotlights Credit for Other Dependents

IRS Spotlights Credit for Other Dependents

Much has been made recently of the Child Tax Credit. And what’s not to like? This refundable credit could be worth thousands of dollars in refund and recent legislation allows advance payments to qualified taxpayers.

But what if a taxpayer’s dependents just don’t qualify for the Child Tax Credit?

The Internal Revenue Service there’s a credit for those dependents too: the aptly named Credit for Other Dependents.

While not quite as beneficial as the Child Tax Credit—it’s worth $500 for each dependent that qualifies—the Credit for Other Dependents still gives some measure of help to taxpayers who might otherwise go without.

Like most tax credits, there are conditions for qualifying, including:

  • Dependents who are age 17 or older.
  • Dependents who have individual taxpayer identification numbers.
  • Dependent parents or other qualifying relatives supported by the taxpayer.
  • Dependents living with the taxpayer who aren't related to the taxpayer.

Taxpayers will see a reduction in the credit if their income is more than $200,000. The phase-out for married couples filing jointly is $400,000.

Taxpayers can claim the Credit for Other Dependents if the person claimed for the credit is a dependent on the taxpayer’s tax return. The dependent being claimed, however, cannot be used to claim either the Child Tax Credit or the Additional Child Tax Credit.

Any dependent claimed for the Credit for Other Dependents must be a U.S. citizen, U.S. national or a resident alien.

Taxpayers can claim this credit along with the Child and Dependent Care Credit and the Earned Income Credit.

The Instructions for Form 8812 can help taxpayers decide if they can claim the Credit for Other Dependents.

For more information, check out:

Source: IRS Tax Tip 2021-144

Bob Williams

Forget genes; I’ve got words in my DNA. Communication has been part of who I am nearly all my life. From a long career in radio news to another one in newspapers – and a University of Georgia journalism degree sandwiched between the two – language has been my life. I’ve also been fortunate to have learned the tax business from the ground up here at Drake, starting with 1040.com online forms some years ago before moving on to work on the Web. In all things tax-ish, we aim to give you tools you can use.