This year, you could be one of the millions of people who will see extra savings due to new tax breaks, tax credits and expanded health benefits that lawmakers approved in theand other means as a way to help people get through the . These cash-back and money-saving benefits, which , arrive along with the for and their (you can ).
Whether you are eligible for these new benefits depends on several different things, including your, or -- which means not everyone will be able to claim every item listed here. But for many people, these changes could end up saving you hundreds or even thousands of dollars.
Here are seven of the tax credits and health savings you can claim this year that could potentially bring your family a maximum of around $50,000, depending on your personal situation.
$20,576 maximum per family: Free COBRA insurance premium coverage runs through September
Typically, if you lose your job, you can buy insurance coverage through your former employer under the government Consolidated Omnibus Budget Reconciliation Act program. However, you usually have to pay the full price for that insurance, which can be very costly. While it's difficult to estimate COBRA costs, as plans vary depending on how much your insurance plan cost your former employer, the average annual premiums for employer-sponsored health insurance in 2019 were $7,188 for single coverage and $20,576 for family coverage, according to a report from the Kaiser Family Foundation.
Under the March law, the government will pay COBRA premiums for laid-off employees and family members from April 1 through Sept. 30. (However, you're not eligible if you have Medicare, if you left your job voluntarily or if you qualify for new, employer-provided health insurance before that date.)
The stimulus law requires employers to send former workers who qualify for COBRA a notice of eligibility. But if you haven't gotten that, you can call your former employer to make sure you are signed up for coverage. In addition, some states may have their own version of reduced health care, including California.
$1,800 maximum per person: Stimulus check recovery rebate credit
While most people got their first and second stimulus checks automatically, some did not due toor their status as (which often includes those who are , or part of the ). If you didn't receive the full amount that you were owed from the first check ( ) or the second check ( ), or were missing money for any of your dependents, you can claim that money on your 2020 tax return. This is called a . You'll have to file a return to get this credit .
$6,660 maximum per family: Earned income tax credit
Designed to benefit people with lower incomes, the earned income tax credit can reduce your taxable income and wages. Under the Taxpayer Certainty and Disaster Tax Relief Act of 2020, part of the, you can use your 2019 or 2020 amount of earned income to calculate your tax credit for 2020 -- a potentially important provision for people who lost their jobs during the pandemic.
Eligibility for EITC depends on your adjusted gross income, filing status (single, head of household, widowed or married) and number of dependents claimed. Here are the income requirements needed to qualify for the earned income tax credit this year, according to the IRS:
Tax year 2020 income requirements to claim the earned income tax credit
|Children or Relatives Claimed||Maximum AGI (filing as Single, Head of Household or Widowed)||Maximum AGI (filing as Married Filing Jointly)|
If you meet those income requirements, here's how much money you can claim for the earned income tax credit on your 2020 tax return:
- No qualifying children: $538
- One qualifying child: $3,584
- Two qualifying children: $5,920
- Three or more qualifying children: $6,660
Note that if you claim this credit the IRS may request additional information, which could result in your refund being delayed.
$3,600 maximum per dependent: Child tax credit
Theis designed to benefit working families by allowing them to claim a refundable credit per . Under the new , the amount you can claim has gone up: Instead of the previous $2,000 per child, you can now claim $3,600 per child for kids 5 years old and under and $3,000 for children between 6 and 17. Older kids could bring you $500. There are certain income limitations -- , and use our how much money your family might be eligible for.
Evencan take advantage of the credit this year. Money from the credit will be split, with half paid through your tax refund and the other half paid monthly from July to December. ( .)
As with the earned income tax credit, claiming this credit may trigger a request for additional information, which could delay your refund. Note that you likely to take advantage of this credit.
$8,000 maximum per family: Child care credit
To make child care more affordable, the new stimulus law provides a Find out more from the IRS here.-- a total of up to $4,000 for one child, or $8,000 for two or more children. The credit is refundable and available to families making less than $125,000 a year. Those making between $125,000 and $400,000 may receive a partial credit.
$1,000 maximum per person: Saver's credit
If you've made eligible contributions to an IRA or an employer-sponsored retirement plan, you might be able to claim a saver's credit. To do this, you need to be age 18 or older, not be claimed as a dependent on someone else's return and not be a student. The amount you can claim depends on your , and will be a portion of the contributions you made. The maximum credit you can claim is $1,000 ($2,000 if you're married filing jointly). The IRS has a chart to help you calculate your credit.
$7,500 maximum per person: Credit for older adults and people with disabilities
Those age 65 and over or who are retired on permanent and total disability who received taxable disability income for the year, and fall under a certain income limit, may be eligible for this tax credit ranging from $3,750 to $7,500. Use this IRS tool to find out if you qualify for the credit for the elderly or people with disabilities.
If you're wondering about the different tax deductions you may be eligible for, check out our story onand learn even if you work remotely now. Plus, find out , and .