Refundable Credits News and Updates

Find news to share with your clients and other taxpayers, and tips and resources for following the rules for refundable credits.

In this section:

CARES Grant for Higher Education Filing Rules

If you got an emergency financial aid grant from your school because you were affected by the coronavirus pandemic, the grant is free to you. Don’t include it in your income on your 2020 tax return.

Grant funds you use to pay for educational expenses can’t be used to claim the American Opportunity Tax Credit, Lifetime Learning Credit or the tuition and fees deduction on your tax return.

For more details, see FAQs: Higher Education Emergency Relief Fund and Emergency Financial Aid Grants under the CARES Act or Publication 970, Tax Benefits for Education PDF.

Choose a Tax Preparer Wisely

For tips about how to choose a tax return preparer wisely, see need someone to prepare your tax return? and IRS videos on YouTube.

Claim Educational Tax Benefits

If you paused your educational goals or took classes online, you may still be eligible to claim the American Opportunities Tax Credit (AOTC). Tax credits for education such as the AOTC may reduce your tax up to $2,500 per eligible student. You may get up to $1,000 refunded to you even if you are not required to file a tax return.

You can claim a student for only 4 tax years. The years don’t have to be back-to-back and you can take the courses online.

If you don’t qualify for AOTC, consider claiming other educational tax benefits such as the Lifetime Learning Credit and the Tuition and Fees Deduction. For more details on these and other tax credits, see  Tax Benefits for Education: Information Center.

Get Coronavirus Relief

For the latest updates on coronavirus tax relief, see IRS.gov/coronavirus.

Earned Income Tax Credit and Additional Child Tax Credit Relief

If your earned income was higher in 2019 than in 2020, you can use the 2019 amount to figure your Earned Income Tax Credit or Additional Child Tax Credit  for 2020. This temporary relief is provided through the Taxpayer Certainty and Disaster Tax Relief Act of 2020.

To figure the credit, see Publication 596, Earned Income Credit.

How to Determine Eligibility for the Earned Income Tax Credit (EITC)

For help determining eligibility for the Earned Income Tax Credit (EITC) and how to file accurate EITC claims, see  Who Qualifies for the Earned Income Tax Credit (EITC) | Internal Revenue Service (irs.gov). Also, check out these IRS publications:

Is Your Address Up to Date?

Make sure you keep your address up to date with us to prevent delays in receiving letters or refunds we send. Get details on how to change your address.

When Can You Expect to Receive Your Refund?

If you claim the Earned Income Tax Credit or the Additional Child Tax Credit on your tax returns, we by law can’t send the refund before mid-February. For more details, see when to expect your refund if you claim the Earned Income Tax Credit or Additional Child Tax Credit.