If you have children or other dependents you may qualify for a Child Tax Credit (CTC). There have been important changes regarding this tax credit, so it’s important that you stay updated. This post will provide you with the essential information and some tools to determine whether you qualify for this credit.
Some Basic Facts
Taxpayers can claim a Child Tax Credit if they have a qualifying child under the age of 17. A portion of that credit can be refundable for each qualifying child as the Additional Child Tax Credit. This means that the taxpayer can be refunded even if they don’t owe any taxes.
Every qualifying child must have a Social Security Number issued by the Social Security Administration before the due date of your tax return, including extensions.
If the dependent does not have a social security number, then they may still qualify you for the Credit for Other Dependents. If that’s the case, the qualifying dependent must be a U.S. citizen, U.S. national, or U.S. resident alien.
Amounts to Keep in Mind
The maximum amount of the Child Tax Credit per qualifying child is $2,000, while the maximum amount that can be refunded if you don’t owe any taxes is $1,400 per qualifying child.
On the other hand, $500 per qualifying person is the maximum amount for dependents that can’t be claimed for the Child Tax Credit. In that case, you can include dependents older than 16, or dependents without a Social Security Number issued by the Social Security Administration.
It’s important to consider that amounts begin to decrease at $200,000 of modified adjusted gross income, or at $400,000 for married couples filing jointly.
Get Answers to Your Questions regarding CTC
If you wish, you can use the online tool that the IRS provides: Does My Child/Dependent Qualify for the Child Tax Credit or the Credit for Other Dependents? The tool is available online to help you get answers regarding the Child Tax Credit. Before you use it, make sure you have the following information at hand: Your filing status, whether you can claim the person as a dependent, and the person’s date of birth.
However, as in any other topic related to taxes, the best option is to look for the personalized assistance of a professional. Don’t hesitate to contact us to take advantage of the expertise of the professionals at Meadville Tax Services.