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You Earned It! You Claim It!
Tax Credit Guide for Tax Year 2016
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TABLE OF CONTENTS
What’s in this guide?
Introduction
Who Should File Taxes
Types of Tax Credits
Earned Income Tax Credit
Working Family Credit
Child Tax Credit
Child and Dependent Care Credit
American Opportunity Credit
Lifetime Learning Credit
Minnesota K-12 Education Credit
Retirement Savings Credit
Minnesota Homestead Credit Refund
Renter’s Property Tax Refund
Premium Tax Credit
Forms for Each Tax Credit
File Taxes for Free
Tax Preparation Checklist
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Tax ling can be a complicated process. Use this guide as a starting
point when talking to an IRS-certied tax preparer to determine if you are
eligible for tax credits.
Who should use this guide?
Is your household income less than $55,000?
Are you a full-time or part-time resident of Minnesota?
Do you want to know if you’re claiming all the tax credits you’re eligible for?
Would you like to keep 100% of your refund by ling your taxes for free?
If you answered “yes” to any of these questions, this guide is for you!
In this guide, you’ll nd answers to commonly asked
questions:
Am I eligible for this credit?
What is the maximum credit amount?
What documents do I need to claim this credit?
What is the Claim it! campaign?
Claim it! is a public awareness campaign to
increase utilization of the Earned Income
Tax Credit and free tax preparation in Minnesota.
*Disclaimer: This guide should be used for informational purposes only and should not
be used as legal advice. This guide only covers general tax information. For more complete
tax information, speak with a trained tax preparer or consult the Internal Revenue Service
and Minnesota Revenue.
INTRODUCTION
What’s this guide about?
www.youclaimit.org
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WHO SHOULD FILE TAXES
There are instances when you may want to le a tax return even though you are not
required to do so. Even if you don’t have to le, here are some reasons why you may
want to:
You had income tax withheld from your pay
You qualify for the Earned Income Tax Credit
You qualify for the Working Family Credit
You qualify for the Additional Child Tax Credit
You qualify for the Premium Tax Credit
You qualify for an American Opportunity Credit
You qualify for the K-12 Education Credit
You rent or own a home
If your filing
status is
And at the end of 2016
you were
THEN file a return if
your gross income was
at least
Single
under 65 $10,350
65 or older $11,900
Married ling
jointly
under 65 (both spouses) $20,700
65 or older (one spouse) $21,950
65 or order (both spouses) $23,200
Married ling
separately
any age $4,050
Head of
household
under 65 $13,350
65 or older $14,900
Qualifying
widow(er) with
dependent child
under 65 $16,650
65 or older $17,900
Learn about instances when it would be a good idea to file taxes, even if
you are not legally required to file.
Chart for most people who must le
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Non-refundable tax credits can reduce your tax liability, or the amount of
taxes you owe. If a non-refundable tax credit reduces your tax liability to zero, you
do not receive any of the remaining credit amount. If you do not owe any tax, you
do not receive any portion of a non-refundable tax credit.
Example:
John made $18,000 and owes $800 in taxes. He can claim a non-
refundable tax credit worth $1,000. His taxes are reduced to zero but he
cannot claim the remaining $200 from the non-refundable credit.
Refundable tax credits can reduce your tax liability AND any remaining
credit is refunded back to you. Even if you don’t owe income taxes, you can
receive the full amount of refundable tax credits.
Example:
Dalton made $29,000 and owes $1,000 in taxes. He can claim a refundable
tax credit worth $1,500. His taxes are reduced to zero AND he can claim the
remaining $500 from the credit.
Federal credit - To claim this credit, le a federal income tax return.
Minnesota state credit - To claim this credit, le a Minnesota state
income tax return.
Minnesota state property tax refund - To claim this refund, le Form
M1PR.
TYPES OF TAX CREDITS
Learn about the kinds of tax credits you can claim.
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About this credit - The Earned Income Tax Credit (EITC) is a
refundable federal tax credit for taxpayers who worked in 2016 and meet
eligibility rules. Because it is refundable, it is possible to get a refund even if you
don’t owe any tax.
What is the maximum credit? - For tax year 2016, the maximum EITC
amount is
$6,269 for a family with three or more qualifying children.
Are you eligible? - Check the table to see if you meet income and family size
guidelines. Additional rules for the EITC are below.
Additional eligibility rules for the EITC:
You must have earned or self-employment income.
You and your spouse must have a valid Social Security number.
You must have been a United States citizen or resident alien the entire tax year.
If not claiming qualifying children, you must be between 25 and 65 years old.
You cannot be anyone else’s qualifying child.
If married, you can not le Married Filing Separately.
# of
qualifying
children
Single/head of
household, income
less than:
Married filing jointly,
income less than:
Maximum
credit
(up to):
0 $14,880 $ 20,430 $ 506
1 $39,296 $ 44,846 $3,373
2 $44,648 $ 50,198 $5,572
3 or more $47,955 $ 53,505 $6,269

EARNED INCOME TAX CREDIT
Federal credit
Refundable credit
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About this credit - The Working Family Credit (WFC) is Minnesota’s version
of the federal EITC. In general, you must meet the guidelines for the EITC and the
income guidelines listed below.
What is the maximum credit? - For tax year 2016, the maximum WFC
amount is
$2,047 for a family with two or more dependents.
Are you eligible? - You must be a full or part-year resident of
Minnesota to claim the WFC. Check the table to see if you meet income and
family size guidelines.
What documents do you need? - To claim the EITC or WFC, you need to
provide documents stating earned income, such as a W-2 or have self-employ-
ment earnings.
WORKING FAMILY CREDIT
# of qualifying
children
Single/head
of household,
income less than:
Household
income less than:
Maximum
credit
(up to):
0 $14,900 $20,400 $133
1 $39,200 $44,800 $1,061
2 or more $44,600 $50,100 $2,047
Minnesota state credit
Refundable credit
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About this credit - The Child Tax Credit (CTC) is a tax credit for families
that work and claim a child age 16 or younger. If eligible, you may claim up to
$1,000 for each qualifying child.
The CTC is a non-refundable credit, which means it can only reduce the amount
of tax you owe. However, if you are not able to use the full amount of the CTC,
you might be eligible for the
Additional Child Tax Credit (ACTC) (see
below for more information).
What is the maximum credit? - For tax year 2016, the maximum CTC
amount is
$1,000 for each dependent child claimed.
Are you eligible? - To be eligible for the CTC, you must:
Have a federal income tax amount greater than zero
Claim a qualifying dependent child age 16 or younger
Have a SSN or ITIN
Additional Child Tax Credit
You can claim the ACTC if:
You are eligible for the CTC but cannot get the full credit amount because
your taxes are too low, and;
You have three or more qualifying children, or you have more
than $3,000 of taxable earned income and you have at least
one qualifying child.
CHILD TAX CREDIT
Federal credit
Non-refundable credit (CTC) and refundable credit (ACTC)
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About this credit - The Child and Dependent Care Credit (CDCC)
is a tax credit for families that pay someone to help care for a child or adult
dependent. This credit is both a federal and a Minnesota state tax credit.
What is the maximum credit? - The maximum federal CDCC amount is
$1,050 if you have expenses for one dependent and $2,100 for two or more
dependents. The maximum state CDCC amount is
$720 for one dependent and
$1,440 for two or more dependents.
Are you eligible? - You and your spouse must have:
Earned income in 2016 (or be a full-time student)
Paid someone to care for your dependent child under age 13 (or an adult
unable to care for him/herself) who lived with you for more than half the
year
Paid for the care in order to work, look for work, or attend school full-time
A household income of less than $39,510 (Minnesota state credit only)
What documents do you need?
You must have your care provider’s taxpayer identication number or Social
Security number as well as documentation of your paid expenses.
Married, ling jointly, and had a child born in 2016?
You may be eligible for the Minnesota
CDCC, even if you did not have any
eligible expenses.
CHILD AND DEPENDENT
CARE CREDIT
Federal and Minnesota state credit
Federal credit is non-refundable, state credit is refundable
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About this credit - The American Opportunity Credit (AOC) can help
make post-secondary education more affordable. If you, your spouse, or your
dependent attended an eligible post-secondary institution (education beyond
high school, such as college) in 2016, you should see if you’re eligible.
What is the maximum credit? - For tax year 2016, the maximum AOC
amount is
$2,500 for each eligible student with qualifying post-secondary
expenses. Up to $1,000 of the credit may be refundable. Qualifying expenses
include tuition, enrollment fees, and required course materials whether or not the
materials are bought at the educational institution.
Are you eligible? - You, your spouse, or your dependent must be an eligible
student to claim the AOC. An eligible student is a student who:
Is pursuing a degree or other recognized education credential at an eligible
educational institution
Is enrolled at least half-time for at least one academic period in 2016
Has not completed the rst four years of post-secondary education at
beginning of the tax year
Has not been convicted of a felony drug offense
Has not claimed the AOC (or the Hope Credit) four times
Has an SSN or an ITIN
What documents do you need?
Form 1098-T, provided by the educational institution, is required to claim tuition
expenses for the AOC. Itemized receipts are required to claim other qualifying
expenses.
AMERICAN
OPPORTUNITY CREDIT
Federal credit
Refundable (up to $1,000) and non-refundable credit (up to $1,500)
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About this credit - If you, your spouse, or your dependent attended a post-
secondary institution in 2016 but are not eligible for the AOC, you may be able
to claim the
Lifetime Learning Credit (LLC) instead.
The LLC is a non-refundable credit available for an unlimited number of years
for students enrolled at an eligible educational institution. Qualifying expenses
for the LLC include tuition and fees required for enrollment. Unlike the AOC,
expenses for educational materials only qualify if the student is required to
purchase materials from the post-secondary institution.
What is the maximum credit? - The LLC amount is up to $2,000 per
return.
Are you eligible? - You, your spouse, or your dependent must be an eligible
student to claim the LLC. An eligible student must have attended a qualifying
educational institution to acquire or improve job skills. Unlike the American
Opportunity Credit, the student does not need to be pursuing a program leading
to a degree or other education credential. Additionally, the felony drug conviction
rule doesn’t apply.
What documents do you need?
To claim tuition expenses for the LLC, refer to Form 1098-T, which is provided by
your educational institution.
LIFETIME LEARNING CREDIT
Federal credit
Non-refundable credit
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About this credit - If you paid qualifying education expenses for your
qualifying child in grades K through 12, you may be able to claim the
Minnesota K-12 Education Credit.
The credit amount is up to 75% of qualifying expenses, such as:
Paper, pens, pencils, notebooks, and rulers
Purchase or rental of musical instruments
Transportation fees for school-time eld trips
After-school educational programs, tutoring, or academic summer camps
Computer hardware, educational software purchases (only up to $200 in
computer and software expenses can be used to calculate the credit)
What is the maximum credit? - For tax year 2016, the maximum K-12
Education Credit amount is
$1,000 per child.
Are you eligible? - To claim the credit, you must have a qualifying child
in grades K through 12. Your household income must be below $37,500 for
families with one to two children. The income limit increases by $2,000 with
each additional child beyond two. (Example: The income limit for a family with
four qualifying children is $41,500.)
What documents do you need? - To claim this credit, you must have
itemized receipts of your educational expenses on record.
MINNESOTA K-12
EDUCATION CREDIT
Minnesota state credit
Refundable credit
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RETIREMENT SAVINGS CREDIT
Federal credit
Non-refundable credit
About this credit - The Retirement Savings Credit gives a special tax
break to those who are saving for retirement.
What is the maximum credit? - The maximum credit amount is 50%,
20% or 10% of your retirement plan or Individual Retirement Account (IRA)
contributions up to $2,000 ($4,000 if married ling jointly), depending on your
income.
Are you eligible? - Eligibility for the RSC depends on your ling status and
income. General guidelines to qualify for the credit are:
Age 18 or older
Not a full-time student
Not claimed as a dependent on another person’s return
Credit Rate Single Filer Head of Household Joint Filers
50% $18,500 or less $27,750 or less $37,000 or less
20% $18,501 - $20,000 $27,751-$30,000 $37,001-$40,000
10% $20,001-$30,750 $30,001-$46,125 $40,000-$61,500
Example: Christine les as a head of household. She’ll contribute $1,200 to
her retirement plan this year. If her 2016 adjusted gross income is $28,000, she
can claim a 20% Retirement Savings Credit for her contribution, worth $240.
What documents do you need? - Documentation of contributions to a
qualifying retirement plan. This is often recorded on Form W-2.
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About this refund - Homeowners in Minnesota may be eligible for the
Homestead Credit Refund. This refund is based on your income and the
amount of property taxes you will pay in 2017. Minnesota Revenue starts issuing
Homeowner refunds in late September. The nal deadline to claim the 2016
refund is August 15, 2018.
What is the maximum refund? - For tax year 2016, the maximum
property tax refund for homeowners is
$2,660.
Are you eligible? - To claim the property tax refund, you must:
Not be a dependent
Have been a full- or part-year resident of Minnesota in 2016
Have all property taxes paid (or have payment arrangements)
Have a household income less than $108,660
Have homestead classication approved for your home
Have owned and lived in your home on January 2, 2017
What documents do you need?
2017 Property Tax Statement from your county.
Mobile homeowners need a Certicate of Rent Paid (CRP) and a 2017
Property Tax Statement from your county.
MINNESOTA HOMESTEAD
CREDIT REFUND
State property tax refund
Refundable credit
Refundable credit
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About this refund - Renters in Minnesota may be eligible for the Renters
Refund. This refund is based on your income and the amount of rent you paid
in 2016. Minnesota Revenue starts issuing renter refunds in mid-August. The
nal deadline to claim the 2016 refund is August 15, 2018.
What is the maximum refund? - For tax year 2016, the maximum
property tax refund for renters is
$2,060.
Are you eligible? - To claim the property tax refund, you must:
Not be a dependent
Lived in a rental unit in 2016 which was assessed property taxes
Have been a full- or part-year resident of Minnesota in 2016
Have a household income less than $58,880
What documents do you need?
Renters need a Certicate of Rent Paid (CRP) provided by their landlord. You
should receive your CRP by January 31, 2017.
If you do not receive a CRP from your landlord, you can work with Minnesota
Revenue to get a Rent Paid Afdavit by calling 651-296-3781 or
1-800-652-9094.
RENTER’S PROPERTY
TAX REFUND
State property tax refund
Refundable credit
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About this credit - If you purchased your health insurance coverage through
MNsure, Minnesota’s health insurance marketplace, you may be eligible to
receive the
Premium Tax Credit (PTC). If you are eligible, the PTC will be
available immediately upon enrollment in an insurance plan, and you do not
need to wait until you le taxes to receive the credit. If you receive the advanced
PTC, you must le a tax return.
What is the maximum credit? - The maximum credit amount is based on
your family size, 2016 household income, and the premium for a standard plan
in your area. You can determine your eligibility and PTC amount when applying
for health insurance on MNsure.
Are you eligible?
Individuals and families with incomes between 100% of the federal
poverty line ($24,250 for a family of four) and 400% the federal poverty
line ($97,000 for a family of four) who purchase health coverage through
MNsure
Must be U.S. citizens or lawfully present in the United States
Individuals eligible for Medicare, Medical assistance, or MinnesotaCare are
not eligible
What documents do you need? To claim this credit, you must have Form
1095-A, Health Insurance Marketplace Statement from MNsure.
Where to get more information
For more information about MNsure and health insurance plans,
contact MNsure at 1-855-3MNSURE (1-855-366-7873), get
help@mnsure.org, or mnsure.org.
PREMIUM TAX CREDIT
Federal credit
Refundable credit
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Earned Income Tax Credit (Federal): Use Schedule EIC. Find credit
amount on line 66a of Form 1040.
Minnesota Working Family Credit (Minnesota): Use Schedule
M1WFC. Find credit amount on line 2 of Schedule M1REF.
Child Tax Credit and Additional Child Tax Credit (Federal): Use
the Child Tax Credit worksheet and Form 8812. Find credit amount on line 52
and line 67 of Form 1040, as appropriate.
Child and Dependent Care Credit (Federal): Use Form 2441. Find
credit amount on line 49 of Form 1040.
Child and Dependent Care Credit (Minnesota): Use Schedule M1CD.
Find credit amount on line 1 of Schedule M1REF.
American Opportunity Credit or Lifetime Learning Credit
(Federal): Use Form 8863. Find credit amount on line 50 and 68 of Form
1040, as appropriate.
Minnesota K-12 Education Credit (Minnesota): Use Schedule M1ED.
Find credit amount on line 3 of Schedule M1REF.
Retirement Savings Credit (Federal): Use Form 8880. Find credit
amount on line 51 of Form 1040.
Property Tax Refund (Minnesota Property Tax Refund): Find credit
amount on line 17 of FormM1PR.
Premium Tax Credit (Federal): Use Form 8962. Find credit amount on line
69 of Form 1040.
FORMS FOR EACH TAX CREDIT
Want to find a credit on your tax return? Find the correct tax form and line on
Form 1040 (federal), Form M1 (Minnesota), or Form MIPR below.
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Tax preparation can be expensive, but it doesn’t have to be. File your taxes for
free at one of Minnesota’s free tax preparation sites or online with MyFreeTaxes
to keep 100% of your refund.
About free tax preparation sites:
Taxes are prepared by IRS-certied volunteers who are passionate and will
help you get your maximum refund.
Free means free. There are no hidden fees at free tax preparation sites.
E-le is available. When used with direct deposit, you’ll get your refund
quickly.
Qualications for free tax preparation sites:
Volunteer Income Tax Assistance (VITA) sites can generally help if your annual
income is $55,000 or less. AARP Tax-Aide program offers free tax preparation for
all taxpayers, particularly those who are age 60 or older. AARP Tax-Aide sites do
not have income or age restrictions.
Find the free tax preparation site closest to you:
Call United Way 2-1-1 at 1-800-543-7707
Visit www.youclaimit.org
File for free online with MyFreeTaxes
MyFreeTaxes (www.myfreetaxes.com) provides free online tax preparation and
ling assistance for taxpayers who made less than $64,000 in 2016.
FILE TAXES FOR FREE
Save hundreds of dollars by filing for free!
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What should you bring with you?
Photo ID
Birthdate and Social Security card or Individual Taxpayer Identication
Number (ITIN) card or letter for all persons listed on tax return
W-2s for each job
All 1099 forms received
Year-end income for MFIP, SSI, MSA, GA, veterans’ benets, workers’
compensation
Last year’s tax return
Direct deposit information: void check or routing and account number
Receipts for dependents’ K-12 educational expenses (including school
supplies, tutoring, music and art classes)
Tuition expenses for university, college or technical college (Form 1098-T)
Interest statement for student loans (Form 1098-E)
Childcare expenses: provider name, address, and Tax ID or Social Security
number
Record of charitable donations
Homeowner statements: mortgage interest statement, real estate taxes paid
(Form 1098), State of Property Tax Payable in 2017
Renter statements: Certicate of Rent Paid
MNsure health insurance (Form 1095-A)
TAX PREPARATION CHECKLIST
Know what you should bring with you to file taxes.
Claim it!
Prepare + Prosper
2610 University Avenue West
Suite 450
St. Paul, MN 55114
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Claim It! is a statewide awareness campaign managed by Prepare + Prosper.
www.youclaimit.org