If you claim at least one qualifying child as a dependent on your tax return, you may be eligible for the child tax credit. This credit is intended to help lower to middle-income households. If your child does not qualify, they may be eligible for the Credit for Other Dependents. We’ve outlined both credits below.
How much is the Child Tax Credit worth?
The Child Tax Credit is worth up to $2,000 per qualifying child. Up to $1,500 of the credit is refundable, which means if you do not owe any taxes or the credit brings your taxes owed to zero, you will receive the remaining credit amount in your tax refund. This refundable amount is known as the Additional Child Tax Credit (ACTC).
Qualifications for the Child Tax Credit
To qualify for the child tax credit, the child must meet all of the following requirements:
- The child must be under age 17 on the last day of the tax year. Individuals 17 and up do not qualify for the Child Tax Credit – see Credit for Other Dependents below.
- The child must be related to you. This includes your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, grandchild, niece, nephew, or legally adopted child.
- The child must be either a U.S. citizen, U.S. national, or U.S. resident alien with a valid Social Security number.
- The child must have lived with you for more than half of the tax year. Note: there are exceptions to the residency test, such as absences related to school, vacation, military service, and medical care.
- The child must not provide more than half of his or her own support.
- You must claim the child as a dependent on your federal tax return (see below for details).
The credit phases out for married taxpayers filing jointly with an adjusted gross income (AGI) of more than $400,000 ($200,000 for all other taxpayers).
Credit for Other Dependents
If you have a dependent who does not qualify for the Child Tax Credit, they may qualify for the Credit for Other Dependents. This credit is worth up to $500 for each dependent who meets the following requirements:
- Is age 17 or older at the end of the tax year
- Has a valid Social Security number or individual taxpayer identification number (ITIN)
- Is a U.S. citizen, a U.S. national, or a U.S. resident alien
- Is a parent or other qualifying relative supported by the taxpayer
- Unrelated dependents may qualify if they live with the taxpayer for the entire tax year
The credit is nonrefundable, meaning it can only decrease your taxes owed. It will not be added to your tax refund. It phases out at the same income limits as the child tax credit – $400,000 adjusted gross income (AGI) for taxpayers filing jointly and $200,000 for all other taxpayers.
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This article was last updated on 11/22/2022.