What are tax credits?
Tax credit is a form of relief incentive provided by the government. You can receive child tax credit if youre responsible for children who are below the stipulated age. You can qualify for working tax credit if youve lower income or if youre a physically challenged employee.
Types of tax credits
Tax credits are of two types:
- Child tax credits
- Working tax credits
Tax credits arent taxable. And if eligible, you dont have to pay for National Insurance or tax to qualify, i.e. it is tax free! You may use our website to know clear-cut information on each type of tax credit and find out if youre eligible.
What type of tax credit am I eligible to?
Many people often qualify for one of the tax credits or both. Review the following information to know more on eligibility criteria.
Child tax credit
If youve at least one child or a young one living with you, you can claim child tax credit:
- If youre taking care of a new born baby
- If children under 16 are living with you
- If youre responsible to fund education or training of children aged between 16 to 20
To receive child tax credit you dont have to be employed. You can contact us to know the details on what type of tax credits youre entitled to, or to figure out what type of training and education counts for receiving child tax credit.
Working tax credit
The compensation on working tax credit is calculated based on the amount your job pays you and the hours you work for. Whether youre an employee or a self-employed professional, you can claim tax credit in both the cases. WTC can be availed by individuals who:
- You have children or even if
- You dont have children
It doesnt matter the hours you work, but only paid work is taken in to account to claim WTC. However, there are a few limitations.