To claim a child tax credit, your qualifying child must be under the age of 17 at the close of the tax year. The child tax credit is partially refundable for some taxpayers who have earned income below certain thresholds or at least three qualifying children. Because the child tax credit reduces the tax on income dollar-for-dollar, it is therefore, considerably more valuable than a tax deduction.
The child tax credit is tied to the child's dependency exemption. A qualifying child for purposes of the child tax credit must also be the taxpayer's dependent. Generally, a qualifying child for the credit is someone who meets the following criteria:
Is the child under age 17 at the end of the tax year for which the credit is claimed;
Is your son, daughter, adopted child, stepchild or eligible foster child, brother, sister, stepbrother, stepsister, or a descendant of any of these individuals;
Is a U.S. citizen, U.S. national or resident of the U.S.;
Did not provide over half of his or her own support; and
Must have lived with you for more than half of the tax year (there are some exceptions to this criteria).
This maximum credit begins to phase out when modified adjusted gross income exceeds $110,000 for taxpayers filing joint returns, $75,000 for single taxpayers, or $55,000 for married taxpayers filing separate returns.
Please contact our office if you have any additional questions or comments about how the rules may apply specifically to your situation.
IRS Circular 230 Disclosure
Pursuant to U.S. Treasury Department Regulations, information contained in this article is not intended by TOPC Potentia P.C. to constitute a covered opinion pursuant to regulation section 10.35 or to be used for the purpose of (i) avoiding tax-related penalties under Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any tax-related matters addressed herein.
