Understanding Tax Credits for Native American Families

cjoycolton5
Jan 23
2 min read

Tax credits: according to the IRS, they are a dollar-for-dollar amount which can be used to significantly reduce your tax liability and provide much-needed financial relief. For Native American families, there are specific tax credits that can be especially beneficial. This guide will help you understand these credits and how to claim them.

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1. Earned Income Tax Credit (EITC)

What it is: A refundable tax credit for low- to moderate-income working individuals and families. The amount of the credit depends on your income, filing status, and number of qualifying children.

Why it matters for Native American families: Many Native American families face economic challenges, and the EITC can provide a significant financial boost.

How to claim it: You must file a federal income tax return, even if you don't owe any tax. You'll need to provide information about your income and family size.

2. Child Tax Credit (CTC)

What it is: A tax credit of up to $2,000 per qualifying child under age 17. A portion of the credit may be refundable.

Why it matters for Native American families: Large families can benefit significantly from the CTC, helping with the costs of raising children.

How to claim it: You must file a federal income tax return and provide information about your qualifying children, including their SSNs.

3. American Opportunity Tax Credit (AOTC)

What it is: A tax credit for qualified education expenses paid for the first four years of post-secondary education.

Why it matters for Native American families: The AOTC can help make higher education more affordable, encouraging students to pursue their educational goals.

How to claim it: You must file a federal income tax return and complete Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits).