Let’s discuss the Child Tax Credit. It’s a tax credit, taken annually, by people with children. The credit does not apply to everyone, however, and there are limitations and rules that govern when it can be used. Here are a few reasons why the Child Tax Credit might be a big advantage for your family.
The amount of the Child Tax Credit is one-thousand dollars per qualifying child. That means if you have three children who qualify for the Child Tax Credit, then you will get one-thousand dollars for each of the qualifying children. The child needs to be under the age of seventeen to qualify (sixteen and under).
To claim the child, you will need to have a legal parental relationship with the child. This relationship includes: son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, grandchild, niece or nephew. Brother, sister, etc., applies only in the case that the child meets the requirements for financial support. In order for the child to meet the financial criteria, the child cannot have provided more than half of their own support—the bulk of the financial responsibilities should fall on the parent.
There are also citizen and resident requirement to meet when claiming this credit. The child must be a citizen of the United States, a U.S. National, or a legal resident alien. The child needs to have lived in your household, in your care, for half the year. There are some exceptions to this requirement, however they don’t apply to everyone, and should be discussed with your tax preparer.
It’s for reasons such as these that hiring a tax preparer, come tax season, is important. Your relationship with your child may not be black and white. You might not know if your child qualifies for the credit or not. A qualified, professional tax preparer can help you through the process; they can make sure you get each and every dollar back on your taxes. Remember, if you make a mistake on your taxes, the IRS may audit you to get every last penny, but they won’t be banging on your door ready to hand you back money you’ve already paid. Don’t leave money behind.