Owith the United States Still in the midst of a cost of living crisis, people across the country are keen to save as much as they can to weather the current storm that has engulfed the country. The root cause of the crisis can be traced back to the COVID-19 lockdown measures which caused shortages in the supply chain across the country, in turn driving up the price of several groceries.
The other additional factor was Russia’s invasion of Ukraine with the resulting sanctions on Russian oil imports, causing the cost of gas to skyrocket, with the average gas price reaching an all-time high. achieved in the country. The resulting inflation forced the Federal Reserve to step in and raise interest rates to curb the runaway rate of inflation.
While this has dampened the rate of inflation to some extent, which has lowered the price of gasoline, it has meant that borrowing has become more expensive with America now on the brink of a recession.
If you had a child last year, it might be important to know how to best weather what could be tough times for the economy.
Child tax credit
Child Tax Credit (CTC) is a government-initiated program that entitles eligible Americans to certain tax relief if they have a child.
The two main criteria required to qualify for the CTC are that you must have an income of less than $200,000 or $400,000 if you are depositing with a partner and your child(ren) must be under 17 years old.
In 2023, the maximum amount one can earn through the CTC program is $2,000, with up to $1,540 being redeemable.
Earned income tax credit
You may also be eligible for a tax refund of up to $3,733 if your income is less than $43,492 if you file alone, or $49,622 if you file with a partner.
Adoption tax credit
If you adopted a child, you are expected to receive up to $14,890 of adoption-related expenses you incurred per child, provided you have an income below $263,410.