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How To Qualify For The Child Tax Credit


As a local business in Colorado Springs, we strive to provide our clients with affordable and high-quality tax services. Bennett CPA LLC understands how quickly taxes can become confusing, and that is why we are here to provide you with the knowledge necessary to make informed tax decisions. As an experienced CPA, Merrill Bennett is able to assist you throughout your entire tax process, from figuring out which tax forms you need to navigating a tax extension.

As an expert in the field, Merrill Bennett is here to answer all of your questions, including, “What is a child tax credit?” It can be extremely confusing navigating your taxes, while trying to determine if you qualify for any advancements or tax breaks. At Bennett CPA LLC, our goal is to provide you with all of the resources necessary to prepare for and navigate tax season.

What Is A Child Tax Credit?

Many stimulus packages have been presented during the pandemic. One of these stimulus packages proposed that the child tax credit be increased. The proposed amount is $2,000 for children under the age of 17.

The child tax credit is a child-focused federal tax credit that was put in place in an effort to reduce citizens’ tax bills. The child tax credit is a refundable credit up to $1,400. This means that if you received the credit and it brought your tax liability below zero, the IRS would send you the remaining amount of the credit.

Child Tax Credit Requirements

Receiving a child tax credit can be immensely beneficial for you and your family, but it can be hard to determine if you are eligible for the child tax credit. The following requirements help the IRS determine if your dependent is eligible for the child tax credit.

  1. Age: The child must be 16 or younger at the end of the tax year.
  2. Relationship: The child must be a biological child, foster child, stepchild, adopted child, sibling, step sibling or half sibling. The child can also be a descendant of these relationships, such as a grandchild or niece.
  3. Support: The child must not have provided more than half of the amount of money used for their living expenses.
  4. Dependent: You must claim the child as a dependent on your federal tax return.
  5. Citizen/Resident: The child must be a U.S. citizen, U.S. national or U.S. resident alien. As of 2018, the child must also have a social security number.
  6. Residency: The child must have lived with you for more than half of the tax year.

In order to qualify to receive the credit, the IRS also examines your income. A taxpayer must fall within the income limits to claim the child tax credit. You must have earned at least $2,500 and the maximum income is determined by your filing status.

  • Single – maximum income amount is $200,000
  • Head of household – maximum income amount is $200,000
  • Married, filing jointly – maximum income amount is $400,000
  • Married, filing separately – maximum income amount is $200,000
  • Qualified widower – maximum income amount is $400,000

You may be able to file for child tax credit if you are over the income limit within a certain amount. If you are able to do this, then you will only receive a partial amount of the tax credit.

Claiming The Child Tax Credit

If you are eligible for the child tax credit, then be sure to claim it on Form 1040. The child tax credit is not rewarded automatically, so you need to make sure to claim it on your tax return. You can also claim the credit on Form 1040NR. To calculate how much of the credit you qualify for, use this worksheet.

Increase Your Tax Return With Our Exceptional Team

Tax season can be a stressful time, but it doesn’t have to be with Bennett CPA LLC. With the evolving stimulus package proposals, determining if you are eligible to claim a child tax credit can seem more complicated than before. There is still time to schedule an appointment and have all of your tax questions answered. The knowledgeable team at Bennett CPA LLC will make sure to provide you with all the answers you are looking for, help you fill out your tax forms and file your tax return.


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