The Child Tax Credit is a nonrefundable credit offered by the IRS that may reduce your tax liability by as much as $2,000 for each of your qualifying children. However, it is important to note that the Child Tax Credit is a nonrefundable credit which means that it is used to only reduce your tax liability, if any.
For example, if you qualify to receive $2,000 in Child Tax Credit but your tax liability is only $300, the available Child Tax Credit will reduce your $300 tax liability to $0 but the remaining $1,700 of the $2,000 will not turn into a refund for you. However, it is possible that you could qualify for the Additional Child Tax Credit.
The Additional Child Tax Credit is the refundable version of this credit, that has a maximum worth of $1,400. Unlike the Child Tax Credit, the Additional Child Tax Credit is calculated off of your earned income. You must have an earned income amount of at least $2,500 in order to receive the Additional Child Tax Credit.
Both the Child Tax Credit and Additional Child Tax Credit are automatically calculated within your account based on the information provided in your return. To determine if you have received either of these credits, from within your My Account screen, select the "Summary" tab from the navigation bar followed by "Show Details" next to Tax and Credits (for Child Tax Credit) and Payments (for Additional Child Tax Credit).
A qualifying child for purposes of the child tax credit is a child who meets all of the following:
- Is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of them (for example, your grandchild, niece, or nephew),
- Was under age 17 at the end of the tax year
- Did not provide over half of his or her own support for the tax year
- Lived with you for more than half of the tax year
- Is claimed as a dependent on your return
- Does not file a joint return for the year (or files it only as a claim for refund)
- Was a U.S. citizen, a U.S. national, or a U.S. resident alien. For more information, see Publication 519, U.S. Tax Guide for Aliens.
- Must have a Social Security number issued before the due date of your 2019 return.
If your dependent is older than 17 or does not yet have an SSN, you may be eligible for the Other Dependent Credit.
For additional information on each credit, please refer to IRS Publication 972.