Filing a Tax Return to Claim a Refundable Tax Credit

Even if you don't owe any taxes, you may want to file a tax return to get a tax credit refund from the IRS.

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If you received no income for the tax year, you don't have to file a tax return. Even if you did receive income, you may still not have to file for that year. It all depends on the amount of your income, your filing status (to determine your filing status, see Nolo's article, What's Your Tax Filing Status?), your age, and the type of income you received. The IRS has an Interactive Tax Assistant on its website you can use to determine if you need to file a return. The instructions for Forms 1040, 1040A, and 1040-EZ also list filing requirements.

However, you may want to file a return, even though it's not required. Here are two reasons why.

You Are Owed a Tax Refund

You may be owed a refund by the IRS if:

  • you worked last year and your employer withheld federal income tax from your pay
  • you made estimated tax payments to the IRS, or
  • you had a prior year overpayment applied to this year’s tax.

You must file a return to claim any excess tax you paid during the year.

You Qualify for a Refundable Tax Credit

There are several types of tax credits designed to help low-income people that are refundable--that is, you are entitled to be paid the amount of the credit even though you don't owe any income tax to the IRS. In effect, the IRS is giving you money for being you. You must file a tax return to claim any of these tax credits. Millions of low-income people who qualify for refundable credits don't get them because they don't file a return. These refundable credits include:

Earned Income Tax Credit. If you worked but earned less than $51,567 (2014), you may qualify for Earned Income Tax Credit ("EITC"). Families with children may qualify to get up to $6,044. Low-income childless adults can also qualify. Use the IRS's EITC Assistant to find out if you qualify.

Additional Child Tax Credit. If you have at least one qualifying child and you don’t get the full amount of the Child Tax Credit, you may qualify for the additional child tax credit. For example, a family of four (husband, wife, and two children) with an income of $45,000 would receive $1,000 tax credits for each child. You must file and use new Schedule 8812, Child Tax Credit, to claim the credit. To learn more about this and other credits for parents, see Nolo's article on Child Tax Credits.

American Opportunity Credit. If you or someone you support is a student, you might be eligible for the American Opportunity Credit. You can get up to $1,000 for each student. You must file Form 8863, Education Credits, and submit it with your tax return to claim the credit.

Health Coverage Tax Credit. This tax credit expired at the end of the 2013 tax year. If you received Trade Adjustment Assistance, Reemployment Trade Adjustment Assistance, Alternative Trade Adjustment Assistance, or pension benefit payments from the Pension Benefit Guaranty Corporation, you may have been eligible for a Health Coverage Tax Credit. Spouses and dependents were also eligible. If you were eligible, you could receive a 72.5% tax credit on payments you made for qualified health insurance premiums.


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