The child tax credit is a tax refund facility provided to taxpayers with children under the age of 17. A tax credit of $3,000 per child under the age of 17 is allowed for every qualifying child. The amount of tax credit increases to $3,600 for the child less than 6 years of age on Dec 31, 2012. However, the rule is not exclusive for every child, and the child needs to fulfill certain criteria to be a qualified child.
In case of low earning taxpayers whose tax credit exceeds the amount of tax owed, they may receive a refund of up to $1,400 per child. It is pertinent to mention here that the other dependents, including the children between ages 17-18 and college students between ages 19-25, can also claim a non-refundable credit up to $500 per child.
Child Tax Credit Qualification Criteria in Lewiston, ME
Let us discuss now the qualifying criteria for the child to be eligible for this tax credit:
Age: The age of the qualifying child must be less than 17 on the closing date of the tax year. This means that the child must not be older than 17 years on 31st December of the tax year for which you are claiming the credit.
Relationship: The child must be your own child, stepchild or the foster child that the court has placed with you. A legally adopted child is always considered your own child and will qualify for this credit. Your brothers, sister (even the step ones) are also eligible for the tax credit if they are otherwise eligible as per the age criteria.
Support: The child must not have provided the financial help more than half of what’s needed for his financial support to the taxpayer who is applying for credit.
Dependent: taxpayers must claim and prove that the child is financially wholly dependent on the taxpayer. To prove this, you need to provide proof of the child living with you for more than six months within the year and not provided for half or more of his financial support.
Citizenship: The child must be a US citizen, US resident alien, or US national to be qualified for the Child Tax Credit or CTC. The individuals born in American Samoa or in the Commonwealth of Northern Mariana Islands are referred to as US nationals for tax purposes.
Residence: Just like citizenship, the residence of a child is also of importance in this matter. The child must have resided with you for more than half of the year.
Family Income: CTC is the credit that is meant to be phased out with the increasing income. In 2021, the minimum threshold for income is $75,000 for single filers and $150,000 for married couples filing joint tax returns. The threshold for the head of household is set at $112,500.
If you and your child(ren) fulfill the above conditions, then you can claim the child tax credit. For 2021, you can claim either 100% CTC on your taxes, or you can get a 50% refund in cash and the remaining half on your later taxes. Your qualification for CTC is assessed from your tax returns, so you must provide the required information in a way that satisfies the tax examiner.
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