The Credit for Other Dependents (ODC) is a non-refundable tax credit that provides financial relief for taxpayers who support dependents who do not qualify for the Child Tax Credit (CTC) or the Additional Child Tax Credit (ACTC). This credit, issued by the IRS, allows eligible taxpayers to claim up to $500 per qualifying dependent.
While the ODC can be helpful, not everyone qualifies. Knowing the eligibility criteria and income limits is crucial for those looking to claim this credit on their tax return.
Eligibility
To qualify for the ODC, the dependent must meet specific requirements, including:
- Being listed as a dependent on the taxpayer’s return
- Not being eligible for the CTC or ACTC
- Being a US citizen or a resident foreigner in the United States
- Having a valid Social Security Number (SSN), Individual Taxpayer Identification Number (ITIN), or Adoption Taxpayer Identification Number (ATIN)
- Having identification documents issued before the tax return deadline, including any extensions
If these conditions are met, taxpayers can claim the ODC when filing their annual tax return.
Limits
The ODC has certain restrictions that determine how much a taxpayer can receive. These include:
- The credit applies to tax years from 2018 to 2025
- The maximum credit per qualifying dependent is $500
- The credit begins to phase out when the adjusted gross income (AGI) exceeds:
- $200,000 for single filers
- $400,000 for married couples filing jointly
Because the ODC is non-refundable, it can only reduce the amount of tax owed. If a taxpayer does not owe taxes, they will not receive a refund from this credit.
Who Benefits?
The ODC is designed to help families who support dependents who do not qualify for other child tax credits. Eligible individuals may include:
- Teenagers and young adults over 17 who are still in school or financially dependent
- Individuals with disabilities or other limitations that prevent them from supporting themselves
- Elderly parents or other relatives who are financially dependent on the taxpayer
However, studies estimate that about 25% of dependents over 17 who qualify for the ODC do not receive the full credit due to their family’s low income.
Claiming the ODC
To claim the ODC, taxpayers must report their dependents on their tax return and provide the necessary identification details. The IRS will assess eligibility based on income and dependent status. Since the credit is non-refundable, it is best suited for those who owe taxes and can use the credit to reduce their tax bill.
For those who qualify, the ODC can provide some financial relief, but it is not as beneficial as refundable credits like the ACTC. Knowing tax credits and planning accordingly can help taxpayers maximize their tax benefits.
FAQs
Who qualifies for the ODC?
Dependents who do not qualify for the CTC or ACTC.
How much is the ODC credit?
The credit is up to $500 per dependent.
Is the ODC refundable?
No, it only reduces the tax owed.
What are the income limits?
$200,000 for individuals, $400,000 for joint filers.
What dependents qualify?
Teenagers, disabled individuals, and elderly dependents.
