United States

Child tax credit

Citizens, resident aliens, and non-resident aliens may claim a child tax credit if the child is a resident of the United States. The American Rescue Plan amended P.L. 115-97 to extend eligibility to a child 17 years old and younger. The American Families Plan increased the credit to USD 3,000 per child for dependants ages 6 through 17 and USD 3,600 for dependants age 5 and under. Under P.L. 115-97, if the child has not reached the age of 17 by the end of the year, a tax credit is allowed for up to USD 2,000 per child (of which up to USD 1,600 is refundable). The amount of the credit is reduced once the taxpayer’s income reaches USD 400,00 for married filing jointly and USD 200,000 for singles for all other filers. P.L. 115-97 also provided a USD 500 (per dependant) non-refundable credit for a qualifying dependant other than a qualified child. 

Child and dependant care credit

Dependant care expenses paid up to USD 3,000 for one qualifying child or USD 6,000 for more than one qualifying child are eligible for a credit equal to 20% to 35% of the expenses paid, depending upon the taxpayer’s adjusted gross income. The credit is non-refundable.

New Markets Tax Credit (NMTC)

The NMTC Program, enacted by Congress as part of the Community Renewal Tax Relief Act of 2000, is a non-permanent tax credit required to be renewed during each session of Congress. It permits individual and corporate taxpayers to receive a credit against federal income taxes for making Qualified Equity Investments (QEIs) in qualified community development entities (CDEs). P.L. 115-97 preserved the NMTC's existing authorisation.

Other tax credits

Numerous other tax credits exist at the federal, state, and local levels to provide an incentive for certain actions. Thus, determining if one or more of these credits would apply to a taxpayer would require a review of multiple sources of tax law.