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Child Tax Credit

Child Tax Credit (CTC) is a federal tax credit which covers children under 17 years old and is the largest tax provision benefiting families with children. As with any possible credit, or deduction (which the CTC isn’t), the IRS publishes extensive information and qualifications. With the Child Tax Credit, an eligible filer may be able to reduce their federal income tax by up to $1,000 for each qualifying child.

What determines eligibility?

A qualifying child for purposes of the Child Tax Credit  is a child who:

1.  is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half brother, half sister, or a descendant of any of them (for example, your grandchild, niece, or nephew).

2.  was under age 17 at the end of 2015.

3.  did not provide over half of his or her own support for 2015.

6.  lived with you for more than half of 2015. There are some exceptions.

4.  is claimed as a dependent on your federal tax return.

5.  does not file a joint return for the year (or files it onlywithheld income tax or estimated tax paid).

6.  was a U.S. citizen, a U.S. national, or a U.S. resident alien.

If the child is adopted, an adopted child is always treated as your own child. An adopted child includes a child lawfully placed with you for legal adoption.

The Child Tax Credit and other tax credits are, in some cases, not mutually exclusive and carry some different requirements.  Here, in their usual simple, concise wording, is what the IRS has to say about the Child Tax Credit.

If you have questions or would like to talk with me about how this relates to you, contact me. We can help, we’ve done this before. We have Accounting Services Built Around You.