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Those in the United States who care for and financially support a dependent, such as a father or mother, for example, may qualify for a tax benefit known as the Credit for Other Dependents.
This is not a direct deposit, but rather an IRS credit that reduces what the person must pay in taxes.
Credit for Other Dependents: How does it work
The Credit for Other Dependents (ODC) is a credit of up to 500 dollars for each qualifying dependent who does not meet the requirements for the child tax credit.
Unlike assistance that is received in cash, this is a nonrefundable credit: it reduces the tax the person must pay, but it is not returned as money if no taxes are owed. Even so, for many families it represents a concrete saving when filing the return.
Requirements to qualify for this tax credit
To claim the credit, the following conditions generally must be met:
- Relationship or cohabitation: the dependent must be a qualifying relative (father, mother, grandparent, etc.) or a person who has lived with the taxpayer throughout the year.
- Financial contribution: the taxpayer must cover more than half (50%) of that person’s total support during the year.
- Income limit for the older adult: the dependent cannot have gross income above the applicable limit.
- Status and identification number: the dependent must be a U.S. citizen, national, or resident and have a valid Social Security number or taxpayer identification number (ITIN).