Families are always looking for ways to reduce their child care costs. One way you can save money is by taking advantage of the child tax credit! The child tax credit allows you to get back up to $2000 per child in taxes, which makes it highly valuable for all families. To be eligible to claim the child tax credit, your child or dependent must meet certain qualifications and live with you for more than half the year. Keep reading this blog post so that we can go over everything else you need to know about claiming the child tax credit!
At the end of a tax year, any parent or legal guardian with a child aged 17 or younger is entitled to claim the child tax credit. The claiming parent must maintain possession of the child for more than 50% of the year. The kid can’t meet at least half of their own expenses and must live with his or her parent for more than half of the year. When you submit your taxes online, you will be asked the appropriate questions to see if you qualify and how much money you may get back in tax credits for a kid.
If the standard Child Tax Credit you get from this credit is more than your tax debt, you may be eligible for an Additional Child Tax Credit (provided your income is at least $3,000). The instructions for Form 1040 may be found in the tax code that is printed on Schedule A, Line 6. On this form, you will need to calculate if this applies to your current family situation by filling out the following questions.
The IRS offers a child tax credit worksheet as a helpful tool. It may be found in IRS Publication 972. The objective of the worksheet is to assist you in determining your current eligibility for the child tax credit for the upcoming tax year. You’ll be able to input figures such as your income and the number of qualifying kids you have.
If you have three or more qualifying children, the Additional Child Tax Credit may be a better fit. This is useful if you want to receive a refund rather than decrease your overall tax burden. Work out which option would work best for you using the child tax credit calculator.