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Overview of Tax Credits
Earned Income Tax Credit (EITC)
Child Tax Credit (CTC)
Child and Dependent Care Credit (CDCC)
Recovery Rebate Credits and Economic Impact Payments (Stimulus Payments)
Additional Information

Overview of Tax Credits

What are tax credits?
Tax credits can help reduce the amount of income tax you owe. Some tax credits are refundable tax credits, which can increase your tax refund amount if you owe less than the credit amount. Examples of refundable or partially refundable tax credits include the Earned Income Tax Credit (EITC), Child Tax Credit (CTC), Child and Dependent Care Credit (CDCC), New York State Child and Dependent Care Credit (NYS CDCC), and the New York City Child Care Tax Credit (NYC CCTC).

How will tax credits affect my other public benefits?
In most cases, claiming tax credits does not affect eligibility for benefits like the Food Stamp Program (SNAP), Supplemental Security Income (SSI), Medicaid, Temporary Assistance for Needy Families (TANF), or public or subsidized housing. These credits are not considered income when determining eligibility for these programs, but they may be counted as a resource for some programs if the money is not spent within a certain time frame.

How can I claim tax credits?
You must file your federal and New York State tax returns. If your family earned $85,000 or less or you’re a single filer who earned $59,000 or less in 2023, you may qualify for NYC Free Tax Prep to file for free and keep your whole refund. For more information, go to nyc.gov/taxprep or call 311 and ask for tax preparation assistance.

IRS Refund Delay and Alert about “Early Refund” Products. The IRS must temporarily hold refunds for filers who claim the EITC or ACTC. Beware of paid preparers that advertise “express refund advances” or “refund anticipation checks,” which cost a lot and lower your refund amount. Remember: No one can give you immediate access to your tax refund

What should a family without a permanent or reliable address do to receive their refund including tax credits?
Families can receive their refund, including any tax credits, by direct deposit or by mail.

Direct deposit, an electronic payment made directly into your bank account, is the fastest safest way to receive payments. An NYC Financial Empowerment Center counselor can help you open a safe and affordable bank account, including those that accept IDNYC, if you don’t have one. Book an appointment at nyc.gov/TalkMoney.

Families can also use the address of a trusted relative or friend or a shelter or drop-in center to receive their refund by mail.

Earned Income Tax Credit (EITC)

What is the Earned Income Tax Credit (EITC)?
The EITC is a federal, state, and New York City tax credit for qualifying families, noncustodial parents, and individuals who work full time or part time or are self-employed. On average, most eligible New Yorkers receive $2,300 in combined EITC benefits. The combined credit can be worth up to $11,000.

Who can claim the federal Earned Income Tax Credit (EITC)?
Basic requirements to qualify for EITC:

• Your income, marital, and parental status fall within the criteria below.
  
  • Married with qualifying children and earning up to $63,398
  • Married with no qualifying children and earning up to $24,210
  • Single with qualifying children and earning up to $56,838
  • Single with no qualifying children and earning up to $17,640
• For tax year 2023, if you have no children, the EITC is only available to filers between ages 25 and 64.
• Qualifying children include biological children, stepchildren, foster children, and grandchildren.
• You have a valid Social Security number (SSN).
• You have investment income of less than $11,000.
• Married Filing Separate: A spouse who is not filing a joint return may claim the EITC if you had a qualifying child who lived with you for more than half of the year and you were legally separated according to state law at the end of 2023 or you lived apart from your spouse for the last 6 months of 2023.

What is the New York State Earned Income Tax Credit?
This is a state credit similar to the federal version (see above). The New York State credit is generally worth 30% of the federal credit. However, New York State has decoupled from federal changes made to the Internal Revenue Code. Because of this, eligibility for the state credit is based on your recomputed federal adjusted gross income (FAGI) – a different calculation than used for the federal credit. For more information, visit New York State Department of Taxation and Finance.

Noncustodial Parents (Married or Single) who are up to date on their child support payments may be eligible for the New York State credit. Visit the New York State Department of Taxation and Finance for more information.

What is the New York City Earned Income Tax Credit?
In tax year 2022, the New York City EITC increased, shifting from a 5% cap of federal EITC levels to 10% to 30% depending on filers’ income. Like the New York State EITC, this credit is based on your recomputed federal adjusted gross income (FAGI) – a different calculation than used for the federal credit. For more information, visit New York State Department of Taxation and Finance. 

Under the City’s expansion of the EITC, a single parent with one child with an income of $14,750 will see the benefit increase from $187 to $933—a 400 percent increase. A married couple with two children and an income of $25,000 will see their New York City benefit increase from $308 to $925 under the City payment—a 200 percent increase. The expansion of EITC will help 800,000 New Yorkers who qualify to better afford essential items like food, rent, and utilities.

Families with incomes below $5,000 are eligible for the maximum expanded NYC EITC.

Child Tax Credit (CTC)

What is the Child Tax Credit (CTC)?
The Child Tax Credit (CTC) is a federal tax benefit that helps families afford the everyday expenses of raising a child. In tax year 2023, the CTC is worth up to $2,000 per qualifying child under 17 when you file your taxes in 2023. The CTC is refundable for up to $1,600.

If you were eligible and did not receive your tax year 2020, 2021, or 2022 CTC, you can still file or amend a previous year return to receive this credit.

Who is eligible for the Child Tax Credit?
The tax year 2023 Eligibility Requirements include:

• Income: The credit is available if you earn up to $200,000 and up to $400,000 if you are married filing jointly.
  
• Relationship: Qualifying children must be your child, stepchild, grandchild, eligible foster child, adopted child, sibling, niece, or nephew.
• Social Security Number: The child must have a Social Security Number (SSN) or Adoption Tax Identification Number (ATIN). The filer may use an SSN or Individual Taxpayer Identification Number (ITIN).
• Living Situation and Support: The child must live with the filer for more than half of the year in the U.S. and be claimed as a dependent on your tax return. The child cannot provide more than half of their own financial support.
  
  Note: Only one parent can claim a child for the CTC. If possible, we urge caregivers in shared custody situations to discuss who will claim the child to avoid filing issues.

Do parents need a Social Security Number to get the Child Tax Credit for their family?
No, you do not need a Social Security Number. You may file or use the IRS Non-Filer portal with an Individual Taxpayer Identification Number (ITIN). However, the children you are claiming must have a social security number to be eligible.

If you do not have an ITIN, get help applying for one at select NYC Free Tax Prep sites.

Can parents who share custody of a child both get the Child Tax Credit?
No. Only one parent can claim a child for the Child Tax Credit (and on their tax return). Whoever the child lives with for the majority of the year, or more than six months, is the parent or caregiver who should claim the child.

If possible, it’s best practice for caregivers in a shared custody situation to discuss who will claim the child to avoid problems.

What should a parent do if they find out their child has been claimed wrongfully by another person?
They should inform the IRS immediately. Find more information at irs.gov/identitytheft.

Can I claim the Child Tax Credit (CTC) for my foster child?
Foster parents may claim a foster child if they meet the eligibility rules for the CTC and if the child was officially placed by an authorized agency. Foster parents and other caregivers cannot claim a child if they didn't live with them for six (6) months or more during 2023.

Do I need my foster child’s Social Security number (SSN) to claim the CTC?
Yes, you need the SSN of any child being claimed as a dependent in order to be eligible for the Child Tax Credit.

What should I do if I don’t have my foster child’s Social Security number (SSN)?
Foster parents are not typically given the foster child’s SSN upon placement and should not apply for a SSN with Social Security Administration on their own. Foster parents should work with the foster care provider agency for assistance.

For foster parents of children under the authority of the New York City Administration for Children's Services (ACS), take the following steps to get child’s SSN for tax filing purposes:

1. The foster parent must fill out form OCFS-4743 and submit the completed form to their agency case planner or other identified designee for this process. The agency will need to scan the form, after verifying the accuracy of the information completed by the foster parent, and e-mail it to the ACS Liaison to the Social Security Administration at ssncards@acs.nyc.gov
2. When ACS receives the completed form OCFS-4743, ACS will verify whether:
   
   1. the foster parent was certified or approved during all or some portion of the tax year listed on the request;
   2. the child whose SSN is being requested was in foster care during all or some portion of the tax year listed on the request; and
   3. that the child resided in the approved or certified foster parent’s home that is making the request for all or some portion of the tax year listed on the request.
3. Upon verification of the above items and the approval of the request, ACS will add the child’s SSN on the bottom of the form OCFS-4743 and will send this to the foster care provider agency. The foster care provider agency will then share it with the foster parent who made the request. 

I didn’t claim the Advance Child Tax Credit Payments in 2021. Am I still eligible for these payments? 

Yes, you are still eligible for these payments until April 15, 2025. You will need to file a return for tax year 2021. Some NYC Free Tax Prep sites can help you complete your return for the 2020, 2021, or 2022 tax years or correct a return for the 2020, 2021, or 2022 tax year. They may also be able to help with additional years. Find an NYC Free Tax Prep location near you, and use the Services Provided dropdown menu to show sites that amend previous years returns for help with previous year returns. 

Is there a New York State Child Tax Credit?
Yes, the Empire State Child Tax Credit is state tax benefit that helps families afford the everyday expenses of raising a child. The Empire State child credit is generally worth 33% of the federal CTC and Additional CTC (ACTC). However, New York State has decoupled from federal changes made to the Internal Revenue Code. Because of this, eligibility for the state credit is based on your recomputed federal adjusted gross income (FAGI) – a different calculation than used for the federal credit. For more information, visit the NYS Department of Taxation and Finance page.

Child and Dependent Care Credit (CDCC)

What is the Federal Child and Dependent Care Credit (CDCC)?
The federal Child and Dependent Care Credit is a tax benefit to help families pay for childcare for children under the age of 13 or the care of adult dependents who were physically or mentally not able to care for themselves. For tax year 2023, filers may be eligible to claim up to $3,000 of the cost of care services for one qualifying person and $6,000 for care services for two or more qualifying persons and be reimbursed for up to 50% of these costs.

What is the New York State Child and Dependent Care Credit (NYS CDCC)?
Similar to the federal credit (see above), the NYS Child and Dependent Care Credit is a state tax benefit to help families pay for childcare for children under the age of 13 or the care of adult dependents who were physically or mentally not able to care for themselves. New York State has decoupled from federal changes made to the Internal Revenue Code. Because of this, eligibility for the state credit is based on your recomputed federal adjusted gross income (FAGI) – a different calculation than used for the federal credit. For more information, visit NYS Department of Taxation and Finance.

What is the New York City Child Care Tax Credit (NYC CCTC)?
The NYC CCTC is a local tax benefit to help families who earn less than $30,000 pay for childcare for children younger than age 4. For more information, visit NYS Department of Taxation and Finance.

What if I have older children or qualified dependents who are not children?
The federal and New York State Child and Dependent Care Credits include expenses for qualifying children up to the age of 13 and certain dependents other than children.

What are qualified childcare expenses to claim the credits?
Qualified expenses include money paid out of pocket for the care of a qualifying child or children while you work or look for work. This includes the cost of care outside the home, such as at a day care center, or inside your home, such as a babysitter. Review IRS Publication 503 or ask your tax preparer for more information. Child support payments, expenses reimbursed by a state social service agency, and aid subsidies are not qualified expenses.

How do I get these child and dependent care credits?
You must file your federal and New York State tax returns and provide required information for all qualified expenses. Filers must identify all persons or organizations that provide care for a qualifying child or children, including the provider’s name, address, and Taxpayer Identification Number or Social Security number. Filers should use IRS Form W-10 to request this required information.

Do the credit amounts change based on inflation?
The credit amounts for the federal, state, and City child and dependent care credits do not change value with inflation. They are set by statute.

Recovery Rebate Credits and Economic Impact Payments (Stimulus Payments)

What are Recovery Rebate Credits and Economic Impact Payments (Stimulus Payments)?
During the COVID crisis in 2020 and 2021, the U.S. government issued three rounds of relief payments to eligible individuals and families. If you did not receive the full amount of the three rounds of Economic Impact Payments (commonly known as stimulus payments) that you were entitled to, you can claim the Recovery Rebate to get these funds. Even if you do not owe money, you can still file or amend a tax year 2020 and/or 2021 return to claim this credit.

How many Economic Impact Payments were issued and how much were they?
There were three economic impact payments issued. The amounts varied based on filers' income:

• First Round was up to $1,200 (for single filers) and $2,400 (for joint filers) plus an additional $500 for each dependent child under age 17
• Second Round was up to $600 and $1,200 (for joint filers) plus an additional $600 for each dependent child under age 17
• Third Round was up to $1,400 and $2,800 (for joint filers) plus an additional $1,400 for each dependent child or adult

Some people may also have received Plus-up payments after the third economic impact payment.

What are Plus-up Payments?
“Plus-up payments” were additional payments the IRS sent to people who received a third stimulus payment based on a 2019 tax return or information received from SSA, RRB, or VA, but whose 2020 tax return indicated were eligible for more. For example, they were eligible for a higher amount because of a decline in 2020 income compared to 2019 or a new child claimed on a 2020 tax return.

How do I claim Recovery Rebate Credits?
Missing first and second round payments may only be claimed by filing a 2020 tax return. Missing third payments may only be claimed by filing a 2021 tax return. If you earn $72,000 or less, use NYC Free Tax Prep to file for free! Visit nyc.gov/TaxPrep.

What is the deadline to claim Recovery Rebate Credits? 

If you’re eligible to claim the 2020 Recovery Rebate Credit, you must file a tax return by May 17, 2024, to claim the credit. 

If you’re eligible to claim the 2021 Recovery Rebate credit, you must file a tax return by April 15, 2025, to claim the credit. 

How do I file a tax year 2020, 2021, or 2022 return?
Some NYC Free Tax Prep sites can help you complete your return for the 2020, 2021, or 2022 tax years or correct a return for the 2020, 2021, or 2022 tax year. They may also be able to help with additional years. Use our map to find a site and use the Services Provided dropdown menu for help with previous year returns.

What do you need to claim the Recovery Rebate Credits?
You will need the tax year and amount of the Economic Impact Payments you received.

You should have received or will soon receive IRS letters including the amounts:

• Notice 1444: Shows the first Economic Impact Payment advanced for tax year 2020
• Notice 1444-B: Shows the second Economic Impact Payment advanced for tax year 2020
• Notice 1444-C: Shows the third Economic Impact Payment advanced for tax year 2021
• Letter 6475: In early 2022, the IRS will send this letter confirming the total amount of the third Economic Impact Payment and any plus-up payments you received for tax year 2021.

If you do not have these letters, you can check the amounts in your IRS Online account, under the related tax year tab. Get more information on how to set up or access your IRS Online Account. NYC Free Tax Prep providers can help you create an account.

Additional Information

What other tax credits are available?
For more detailed information based on your specific situation:

• Visit the IRS at irs.gov
• New York State Department of Taxation and Finance at tax.ny.gov

This page was updated on 11/2023.