In the wake of the COVID-19 pandemic, many Americans became accustomed to the financial relief provided by stimulus checks. However, as we approach 2024, it's clear that the era of such federal stimulus programs is drawing to a close. Despite this shift, taxpayers can still find financial relief through a variety of tax credits. These credits, although less direct than stimulus checks, offer substantial support for those who qualify.
One significant opportunity lies in the realm of green energy. Starting January 2024, electric vehicle tax credits of up to $7,500 for new clean vehicles and $4,000 for used EVs will be accessible directly at the point of sale. This initiative aligns with environmental efforts and provides an immediate benefit to those investing in electric vehicles. Additionally, homeowners making environmentally-conscious improvements can qualify for the residential energy property credit.
Families with children can still benefit from the Child Tax Credit (CTC), although its expanded benefits have expired. For 2023, the CTC remains at $2,000 per qualifying child under 17, with an increased refundable portion from $1,500 to $1,600.
Low- to moderate-income earners should consider the Earned Income Tax Credit (EITC), which offers a maximum amount of $7,830 for those with three or more qualifying children in the 2024 tax year, a slight increase from 2023.
Parents should also explore the Child and Dependent Care Credit, applicable to expenses for children under 13 or for the care of a spouse or parent unable to care for themselves. This credit can cover up to 35% of $3,000 for one dependent or $6,000 for two or more.
For students and their families, the American Opportunity Tax Credit offers relief for the first four years of higher education expenses, with a credit worth up to $2,500 per eligible student and a refund of 40% of the total credit exceeding tax liability.
Lastly, the Saver's Credit, also known as the Retirement Savings Contributions Credit, is available for contributions to IRAs or employer-sponsored retirement plans. This credit can be a significant boost for those planning for retirement, with varying credit percentages based on adjusted gross income.
While the direct financial support of federal stimulus checks might be a thing of the past, these tax credits represent a diverse array of opportunities for financial relief in 2024. It's crucial for taxpayers to stay informed and take advantage of these benefits to optimize their financial health in the coming year.
