The Other Dependents Credit (ODC) is a tax benefit that provides up to $500 per dependent for taxpayers who support individuals who do not qualify for the Child Tax Credit (CTC) or the Additional Child Tax Credit (ACTC).
Introduced in 2017 as part of the Tax Cuts and Jobs Act (TCJA), the ODC offers tax relief to families and individuals with dependents who would otherwise be excluded from other similar tax credits.
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Claiming
To qualify for the ODC, a dependent must meet the Internal Revenue Service (IRS) requirements. According to the IRS, eligible dependents must:
- Be claimed as a dependent on the taxpayer’s return
- Not qualify for the Child Tax Credit (CTC) or Additional Child Tax Credit (ACTC)
- Be a U.S. citizen, U.S. national, or U.S. resident alien
- Have a Social Security Number (SSN), Individual Taxpayer Identification Number (ITIN), or Adoption Taxpayer Identification Number (ATIN) issued before the return’s due date (including extensions)
To determine eligibility, taxpayers should carefully review these criteria before claiming the credit on their tax return.
Requirements
The maximum credit amount is $500 per dependent. Taxpayers may claim this credit if they meet the following conditions:
- The dependent can be any age, including 18 years or older
- Dependents must have a valid SSN, ITIN, or ATIN
- The dependent can be a parent or other qualifying relative supported by the taxpayer
- The dependent may live with the taxpayer but not be related
The ODC is non-refundable, meaning it can reduce tax liability but will not generate a refund if the credit exceeds the total tax owed.
Phase-Out
The credit begins to phase out once the taxpayer’s income exceeds $200,000.
For married couples filing jointly, the phase-out threshold is $400,000. This means that taxpayers earning above these limits will see a gradual reduction in their ODC benefits.
The Other Dependents Credit is a valuable tax benefit for those who support dependents not eligible for the Child Tax Credit. Knowing the IRS requirements and phase-out limits ensures taxpayers claim the credit correctly and maximize their potential tax savings.
FAQs
What is the maximum amount for the ODC credit?
The maximum credit amount is $500 per qualifying dependent.
Who qualifies for the ODC?
Dependents of any age who do not qualify for the Child Tax Credit.
Does the ODC apply to parents or relatives?
Yes, if they are supported by the taxpayer and meet IRS criteria.
Can I claim the ODC if my income is high?
The credit phases out for incomes above $200,000 ($400,000 for joint filers).
Is the ODC refundable?
No, the ODC is non-refundable and only reduces tax liability.
