What is the Income Limit for the Child Tax Credit?
The child tax credit is a type of tax credit available to parents and guardians who want to reduce the amount of tax they pay this year.
This tax credit will take your overall tax bill and reduce it dollar for dollar. It’s one of the most rewarding types of tax credits working people can take. If you have a qualifying income, you may be able to take the full value of the child tax credit.
It all depends on how many qualifying children you have and how much you make, though.
Table of Contents
- 1 What are the Income Limits for the Child Tax Credit?
- 2 How Much is the Child Tax Credit Worth?
- 3 How Can You Claim the Child Tax Credit on Your Taxes?
- 4 Am I Eligible to Claim the Child Tax Credit?
- 5 Can the Child Tax Credit Add to My Tax Refund?
- 6 How to Claim the Child Tax Credit
- 7 How to File Taxes Online in 3 Simple Steps - TurboTax Tax Tip Video
What are the Income Limits for the Child Tax Credit?
For married couples filing jointly, the credit income limits begin to phase out as early as $110,000. However, when you take your modified adjusted gross income into account, it can be as high as $200,000.
To be eligible for the child tax credit, married couples filing jointly must make less than $400,000 per year. For all other tax filing statuses, the phaseout limit is $200,000.
The child tax credit calculator can help you figure out if you are within the income limits and how much you can get back.
Your adjusted gross income is what matters when it comes to the child tax credit.
How Much is the Child Tax Credit Worth?
If you’re eligible to claim the full tax credit, the child tax credit is worth $2,000 per qualifying child.
The value of the child tax credit has increased substantially since 1998 when it was worth just $400 per qualifying child.
How Can You Claim the Child Tax Credit on Your Taxes?
To calculate how much you’re able to claim through the child tax credit, you’ll itemize it on IRS Form 1040.
To make sure you get the maximum amount, you’ll also need to use Schedule 8812.
If you’re using one of the many popular tax preparation platforms, all your calculations will be carried out automatically based on the information you provide.
Am I Eligible to Claim the Child Tax Credit?
Additionally, before claiming, you’ll need to refer to the guidelines given by the IRS. Assuming you already know your income, you’ll need to check the five other pieces of criteria to ensure you can make a claim when you file your tax return.
Citizenship – All qualifying children need to be residents of the US, and you need to be able to claim them as a dependent on your tax return.
Age – By the end of the tax year, the qualifying children must be under the age of 17.
Relationship – The child must be related by blood, a grandchild, stepchild, or an adopted child. If they’re an adopted child, they must have lived with you for the entire tax year.
Dependency – A child can only be claimed as a dependent on a single tax return. If parents are separated, they must decide who will be claiming the credit.
Residency – The child must live with you for at least half of the tax year. In special cases, there are some exceptions to this rule.
Can the Child Tax Credit Add to My Tax Refund?
The answer is yes. This is a type of tax credit that reduces your tax bill dollar for dollar. It can also lead to a tax refund.
This tax credit was designed to enable the families who can claim more in child tax credit than their tax bill to get a portion of the credit refunded to them.
How to Claim the Child Tax Credit
You don’t need to worry about figuring this out. Online tax filing makes it easy to claim the child tax credit. After asking you a few simple questions about your family, the tax software will determine for you who qualifies as a dependent on your tax return and how much you qualify for.
That way, you’ll get the biggest tax refund possible with the least amount of hassle.
How to File Taxes Online in 3 Simple Steps - TurboTax Tax Tip VideoRemember, with TurboTax Online Tax Filing we’ll ask you simple questions and fill out the right forms for you. We’ll find every tax deduction and credit you qualify for to get you the biggest tax refund, guaranteed!
Frank Ellis is a Traverse City Tax Preparation Planner and published author. He has written tax and finance related articles for twelve years and has published over 1000 articles on leading financial websites.