Tax Credits – 2020

Tax Credits – 2020

The IRS released the inflation adjusted tax credits for 2020. See if you may qualify.

Earned Income Tax Credit – This is a refundable tax credit for those with earned income that meet the eligibility requirements. The maximum Earned Income Credit for 2020 is $6,660 for qualifying taxpayers who have three or more qualifying children, up from a total of $6,557 for tax year 2019. For the 2020 income thresholds and credit amounts, refer to this table. See this link for the 2019 figures.

Child Tax Credit – The Child Tax Credit is worth a maximum of $2,000 per qualifying child. Up to $1,400 is refundable. The credit begins to phase out at a modified gross income of $400,000 if married filing jointly and $200,000 for others. There is a $500 nonrefundable credit for qualifying dependents other than children.

Lifetime Learning CreditFor taxable years beginning in 2020, the modified adjustable gross income limit for married taxpayers filing jointly is $118,000 and $59,000 for others. This is up $116,000 and $58,000 in 2019.

Adoption CreditThe maximum credit allowed for an adoption of a child with special needs is $14,300. The maximum credit allowed for other adoptions is the amount of adoption expenses up to $14,300. The credit begins to phase out for taxpayers with modified adjusted gross income in excess of $214,520 and is completely phased out for taxpayers with modified adjusted gross income of $254,520 or more.

Use this interactive IRS tool to see if you may qualify for credits.

Colleen Minnich