Looking for extra credit? In addition to the three extra days taxpayers have to file their 2010 return (the deadline was extended to April 18), extended tax credits for 2010 give taxpayers more opportunities to save on their tax bills—if they qualify.
Education
More families than ever will qualify for new education tax credits under the American Opportunity Credit, a renamed expansion of the Hope Credit. The IRS has increased its payback to $2,500—a $700 increase from the previous Hope credit—for tuition and certain fees individuals pay for the first four years of college
To qualify, you must have a modified adjusted gross income of less than $80,000 if you’re single or less than $160,000 for those married and filing jointly. And even if you owe no tax, you can receive up to $1,000 for each eligible college student.
For more information, visit the IRS website or watch an IRS YouTube video about education tax credits. And learn about other education tax benefits detailed in IRS Publication 970.
Home Energy
There are two energy-related tax credits for 2010:
- Non-business Energy Property Credit. If you installed energy-efficient windows or doors or added high-efficiency heating or cooling equipment to your home in 2010, you may be eligible for a new credit. You can get back up to 30 percent of the cost for the home improvements up to $1,500.
- Residential Energy Efficient Property Credit. Alternative energy equipment such as solar electric systems, solar hot water heaters, geothermal heat pumps, and wind turbines may give you another credit. You can get back up to 30 percent of the cost of these items, but make sure you know the rules about the type of residences and costs that qualify.
Other examples of home improvements that could qualify for tax credits include skylights, insulation, central air conditioning and heating, and asphalt roofs with cooling granules.
For more specifics on these and existing alternative energy credits, visit the Energy Star website and watch the IRS YouTube video on alternative energy credits.
Homebuyers
Through the expanded First-Time Homebuyer Credit, you may be eligible for a credit worth 10 percent of the purchase price of your new home, up to $8,000. You must sign a settlement document—commonly a Form HUD-1—for the purchase of your first home on or before April 30, 2010, and close the deal on or before September 30, 2010.
Even those who have lived in the same home for many years may be entitled to a break. New legislation extends a tax credit to long-time residents of the same principal residence if they purchase a new main home. To qualify, you must show that you have lived in your previous home for a five-consecutive-year period during the eight-year period ending on the purchase date of the new home (e.g. for a 2010 home purchase, you must have lived in your current home five consecutive years between 2002 and 2010). The maximum credit for long-time residents is $6,500 or $3,250 for married individuals.
For more information, click here or check out the IRS YouTube video for clarity. More details on the First-Time Homebuyer Credit can be found at the IRS website or by calling the IRS at 800-829-3676.
Family
The maximum adoption credit for 2010 has been increased to $13,170 per child, up from $12,150 in 2009. The credit is refundable, which means eligible taxpayers can get the credit even if they don't owe any taxes. In general, the credit is based on qualified adoption expenses, which include adoption fees, court costs, attorney's fees and travel expenses. Income limits and other special rules apply.