Our program automatically calculates the Child Tax Credit and the Additional Child Tax Credit based on the dependents and income entered into your account.
How much is the credit?
The maximum amount you can claim for the credit is $2,000 for each qualifying child under age 17. This credit is partially refundable. The most that can be refunded to you is $1,400 per qualifying child.
The Other Dependent Credit maximum is $500 per qualifying person.
What are the requirements?
Besides the requirements for the qualifying child, you must have at least $2,500 in earned income on your return to claim the credit. In addition, the Child Tax Credit is limited by the amount of the income tax you owe as well as any alternative minimum tax you owe.
Example: If the amount of the credit you can claim is $2,000, but the amount of your income tax liability is $400, the credit ordinarily will be limited to $1,600 ($2,000 - $400). However, because the credit is only partially refundable, the maximum credit you could claim would be $1,400.
If the amount of credit you can claim is $2,000, but the amount of your tax liability is $0, the maximum credit amount you could claim is limited to $1,400. This is generally indicated as the Additional Child Tax Credit (ACTC) on the return.
Who can be considered a Qualifying Child?
A qualifying child for this credit is someone who:
- Is claimed as your dependent,
- Child must have a SSN (ITIN not allowed for Child Tax Credit or Additional Child Tax Credit)
- Was under age 17 at the end of the tax year,
- Child did not provide more than half of his or her own support for the year
- Child lived with you for more than half of the year
- Child did not file a joint tax return for the year (or files only to claim a refund of taxes withheld or estimated tax paid)
- Is your son, daughter, adopted child, grandchild, stepchild or eligible foster child, your sibling, step-sibling or their descendant, and
- Is a U.S. citizen or resident alien.
Is the credit limited?
Yes, the credit may be limited.
- The credit is limited if your modified adjusted gross income is above a certain amount. The amount at which this phase-out begins varies depending on your filing status:
- Married Filing Jointly $400,000
- Married Filing Separately $200,000
- All others $200,000
- If the amount on line 18 of your 1040 form is less than the total of the Child Tax Credit (CTC) and Other Dependent Credit (ODC), the credit may be limited. If the amount on line 18 is zero, you cannot take either the CTC or the ODC but may qualify for the Additional Child Tax Credit (Cannot claim the Additional Child Tax Credit if you are claiming the ODC only).
If the amount of your Child Tax Credit is greater than the amount of income tax you owe, you may be able to claim some or all of the difference as Additional Child Tax Credit. Any Additional Child Tax Credit is also automatically calculated by the program.
For more information covered in IRS Publication 972, click here.