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Child Tax Credit: Are You Qualified?

Child Tax Credit: Are You Qualified? The child tax credit is a tax credited that can be calculated against a parent or guardian's yearly income tax.  It can be worth up to $1,000 per qualifying child.   The amount of the tax credit depends on the income level of the family.  In order to receive the full credit amount, the family cannot earn more than $110,000 in the taxable year.  Any family that earns over $130,000 does not receive any child tax credits.    

Qualifying for the Child Tax Credit

In order to be a qualifying child, the child must meet the requirements of age, relationship, support, dependent, citizenship, and residence.  

1. Age requirement

In order to qualify for a child tax credit, the child must be under the age of 17 in the taxable year.  If the child attains the age of 17 within the year, they do not qualify for the tax credit.  

2. Relationship requirement

In order to claim the child, they must be the taxpayer's daughter, son, foster child, step-child, brother, sister, or any descendant of these, including grandchildren.  Adopted children are always considered a legal child for tax purposes.   

3. Support and Dependant requirements

In order to qualify for a child tax credit, the child must not have contributed more than half of their own support during the taxable year. The child also must be claimed as a dependent in your annual income tax form.  

4. Citizenship and residency requirements

In order to qualify for the child tax credit, the child must be a United States citizen or have U.S. national or U.S. resident alien status.  The child must have also lived with the taxpayer for more than half of the taxable year.  Some exceptions are available, but you must consult with your tax professional in order to further explore them.     

The affect of the Child Tax Credit 

In order to qualify, a married couple filing a joint tax return cannot earn more than $130,000 per year, and the tax credit is lowered when the reported income is between $110,000 and $130,000.  If the tax credit is being sought by a married individual not filing a joint return, the full child tax credit will not apply for income over $55,000.  All unmarried single income tax filers will receive the full child tax credit up to an income of $75,000.   

In certain circumstances, some families may have more child tax credit amounts than tax liability.  In these cases, which may arise due to family support from untaxed sources or government aid, the overlapping child tax credits is refunded to the families just as any other tax refund.  If two parents claim a child for tax credit purposes, do not reside together, and the child spends time with both parents, the parent with whom the child spends most of the taxable year with will receive the tax credit.  If the child spends an equal quantity of time with each parent, the one with the higher gross income will be given the right to claim the child tax credit.  

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