Is it possible for a greater tax refund (due to credits) then the amount that was actually taken?

Question

By taking the following credits:

Credit for Child Care Expense
Child Tax Credit
Earned Income Credit
Additional Child Tax Credit

while claiming Head of Household, I am calculating a refund greater then what was taken out of my paycheck last year. Is this possible??? Everything mentioned above are valid credits that I am entitled to.

Answer 1

With the earned income credit you can get back more than you paid. There is even a form you can fill out that will let you get it added to each paycheck.

Answer 2

Yes.
I made roughly $20,000 last year.
I had almost $800 withheld in Fed. Tax.
With the 4 credits above, I am getting approx. $5600 back from the IRS.
I claim 3 exemptions (myself & 2 kids) & single head of household on my taxes. I claim 3 on my W-4, so the tax that is withheld is right where it should be. If I was not able to claim the above 4 credits, I would only receive about a $600 return. If I would have wanted more back in my return and less in my paychecks, I would have only claimed 0,1 or 2 on my W-4. My employer would have withheld more taxes and my refund would be bigger.

I also have student loan interest and also that new telephone tax credit as well.

Who says kids aren't good for anything???? lol...just kidding!!

If you make under $53,000, you can file FOR FREE on the IRS website.
www.irs.gov and look for the "free file" link. It will be there tomorrow. Follow the directions and it will bring you to a list of companies that you can file through. I have used H & R Block for the past few years and I have never had any problems. It is easy and if you do it this week, you should have your return, if it is direct deposited, on the 26th of Jan.

If you need any more help, let me know. I have done taxes for 6 years both on my own and for a professional company.

Answer 3

Even if you had claimed 4-6 exemptions or not any on your W4 withholding certificate, this amount is the amount you paid the IRS is federal as well as state withholding. Your tax liability is taken into consideration after your filing status, which was head of household and the amount for each exemption you are claiming, which for 2006 is $3300 each. Next there are credits such as child and dependent care, child tax credit which reduce the amount of your tax liability to the IRS. Then if you carry that down and subtract what your federal withholding was and if there is any additional child tax credits. Any amounts greater than what you paid in is what your refund would be. I've seen some refunds go well above $7,000 for a single parent being head of household and income and exemptions (you and the kids) within their guidelines with the credits I mentioned.

Answer 4

Your friends are wrong, you won't get more by filing the other forms. The only way to get more than you paid in is to be eligible for a refundable credit like earned income credit, additional child tax credit, or first time homebuyers credit. Most credits are non-refundable, which means they can only take your tax to zero, you don't get the extra refunded. Deductions can only take your tax to zero. But recheck your 1040EZ before you file. With income of $14997. not a dependent, you should have had some tax assuming you are single. If you are married filing a joint return with total income of $14997 there would be no tax.

Answer 5

It all depends upon where the credit is given. If the credit allows you to deduct from the income, it will reduce the gross income but you cannot claim a negative income. If the credit is given towards the tax due or refund owed ( the earned income credit, for instance ) then yes, it is possible to receive back more than you paid in.

Answer 6

Only the EIC and the Additional Child Tax credit are refundable, which means you get them whether you owe any taxes or not. The Child Tax Credit and the credit for Child Care Expenses reduce your taxes, and can reduce them to zero, but you don't get the difference back in cash.

Answer 7

Yes, most likely if you qualify for a child tax credit, Earned income credit and so on, You will probably get all of your with holdings back along with your credits. It just depends on your income and how much you had withheld. This is on federal taxes, the state is a whole different story!

Answer 8

There are two types of credits...Refundable and Non-Refundable.

Refundable credits are not limited to the amount of your tax while non-refundable credits are.

The earned income credit is a refundable credit so it is possible to receive a refund greater than your total tax.

Answer 9

Yes...it is most definitely possible that you could be eligible for a higher income tax refund than what you paid in. Happens to my daughter all the time. Low income....lots of kids. Deadbeat ex-hubby!

Answer 10

Yes, because these are "tax credits" , the government gives you this money plus whatever was withheld from your paychecks if you are eligible . The website below will explain each credit.