How to Claim the Child Tax Credit

Posted by on October 27, 2016
Last modified:
See if you are eligible to claim the child tax credit on your tax return this season.

Parents deserve a bit of a (tax) break now and then.

As a busy parent, filing taxes can be found on the To-Do list between Monday’s soccer practice and Thursday’s parent-teacher conference. Do yourself a favor this year and see if you are eligible for the Child Tax Credit. Tax credits are great because, unlike deductions, they reduce your tax bill dollar-for-dollar. That means, a larger tax refund for you and your family!

What is the Child Tax Credit?

The Child Tax Credit offers a credit of up to $1,000 per child to qualifying taxpayers. It is only available to those who can claim a child as a dependent and meet several other requirements.

There is no limit to the number of children you can claim using the Child Tax Credit, however, claiming lots of kids may subject you to the Alternative Minimum Tax (AMT).

Who can claim the Child Tax Credit?

In order to claim the Child Tax Credit, the child in question must:

  • be your son, daughter, stepchild, foster child, adopted child, brother, sister, or a descendant of any of these
  • have lived with you for more than half the year
  • be under age 17 at the end of the year
  • not have provided more than half of his/her own support
  • be a citizen or resident alien of the United States
  • be younger than you
  • not file a joint return with his/her spouse (though there are exceptions)
  • meet the requirements to be claimed as your dependent
  • be claimed by his/her parents – if claimed by someone else, that person must have a higher AGI than either parent.

Are there income limitations?

The Child Tax Credit phases out beyond certain levels of income:

  • $55,000 for married couples filing separately
  • $75,000 for single, head of household, and qualifying widow(er)
  • $110,000 for married filing jointly

The credit is reduced by $50 for every $1,000 of income beyond these thresholds. Note that they are not indexed for inflation.

How much of the credit is refundable?

Generally if credits and deductions manage to reduce your tax liability to zero, you don’t receive the remaining amount as a refund. In other words, the best you can hope for is to break even – there’s no chance of making a profit from your tax return.

But if the Child Tax Credit helps reduce your tax liability to zero, the remaining amount is refunded to you in the form of the Additional Child Tax Credit. Exactly how much is refundable depends on how many kids you have and how much income you earn.

Taxpayers with one or two children can receive the smaller of:

  • the unused portion of the Child Tax Credit, or
  • 15% of your earned income over $3,000

Taxpayers with three or more children can receive the smaller of:

  • the unused amount or,
  • the larger of either
    • 15% of a person’s earned income over $3,000, or
    • the sum of Social Security and Medicare taxes paid minus the earned income credit

Cross off taxes on your To-Do list today!

Keeping track of all these IRS rules and regulations can get confusing. Thankfully RapidTax keeps things simple. Just enter your information into its online application and it will make sure you claim every cent of the Child Tax Credit that you deserve.

Easy, right? You’re done…just in time to get the kids off the bus!

Do you qualify to claim the child tax credit on your tax return this year?

 

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This entry was posted on at 10:00 am and is filed under Tax Deductions and Credits | Blog.

23 Responses to “How to Claim the Child Tax Credit”

  1. Kahlia Wickey says:

    I was wondering was I eligible to the child tax credit for this year and also have I received this before . If I am not registered can I please apply.

  2. Kahlia Wickey says:

    2014 can I apply

  3. RENE says:

    I WAS WONDERING CAN I PUT DOWN MY IPASS IN MY RETURN? AND ALSO GASS I USE FOR GOING TO WORK?

  4. deedee says:

    is there a delay in tax refunds this year?

  5. CJ says:

    IS THERE A LIMIT ON THE NUMBER OF CHILDREN YOU CAN CLAIM ON THIS YEAR TAXES

  6. Antonio says:

    If is claim four qualifying children on my taxes, will I receive child tax credit for all four children? I file joint.

    • Tax Advisor says:

      Hi Antonio,

      If you qualify for all four, then you should receive it. I do suggest checking the IRS website to make sure that you qualify to claim each one for the credit.

  7. chula119 says:

    I have 4 children I went to h&r block and they told me I can only claim 3 is this true or not

  8. Rita says:

    My daughter was 16 till November 21 st 2014. she didn’t qualify for this credit because of one month,that is so wrong!!there should be a cut off.she was 16 the whole year!

  9. Rita says:

    Do not go to H and R Block they raised the prices by 100.00 and didn’t tell there clients.it went from 297.00 last year to 385.00 this year,just wrong!!!

  10. Angel says:

    Can u claim more than 3 children on your taxes

  11. Stephanie O says:

    I have four children that qualify for the child credit, but I am not sure what number to put. It says to add 2 to every child, which would be 8. I am not sure if that’s correct. I make less than $70,000 and single.

    • Tax Advisor says:

      Hi Stephanie,

      When following along with the Personal Allowances Worksheet, you will calculate the maximum amount of allowances you can claim on your W-4 form to abide by IRS standards. Keep in mind that you can always claim less than calculated using that worksheet. Claiming 8 allowances may cause you to have additional tax due to the IRS after filing. Instead, I suggest claiming one allowance for yourself and an additional allowance for each of the dependents you’ll claim on your tax return. This will allow for you to have a bit more in your paychecks while still having a sufficient amount of your income withheld to cove taxes.

  12. Ryan says:

    If neither the mother or father claimed their child in 2014 tax year can they still claim the credit.

    • Tax Advisor says:

      Hi Ryan,

      The person claiming the child tax credit must also be the individual who is claiming the child as a dependent. This is different for the Earned Income Tax Credit and qualifications to claim head of household. These both do not require that the same person be claiming the child as a dependent.

  13. Amy says:

    My ex-husband has 4 children with his current wife, we have 2 children together, in our divorce papers it states he can claim our oldest child who is 16 and I claim our younger child age 15. Both of our daughters live with me 12 months out of the year, but he does pay child support, since he now has 4 kids to claim with his current wife, can I claim BOTH of my children since they have always lived with me, even though the divorce papers say he can claim one of ours? I hope that made sense.. Thank you.

    • Tax Advisor says:

      Hi Amy,

      This a very common situation and it is important for parents to know that custodial parent has the right to claim the child as a dependent. The IRS abides by federal law and not state/county court orders. The custodial parent is the parent whom the child lived with for the majority of nights in the year. If the child lived with both parents for an equal number of nights, then the custodial parent id the one with the higher Adjusted Gross Income. If a parent claims a child solely based on a court order without meeting the IRS requirements to claim the dependent, then the actual custodial parent can dispute that and claim the child instead. Now, it is important to know that the IRS is not responsible for “catching” a non custodial parent. You will need to paper file your return and mail it to the IRS with a cover letter and sufficient documentation to prove that you are the child’s custodial parent. Documentation generally includes school/medical/dental records and other forms in which your address matches the child’s address. Keep in mind that this is a time consuming process since it involves the IRS along with both parties (parents). However, if you are the custodial parent, then it may be worth the time.

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