The Child Tax Credit can be a huge boon to your personal life and financial health, as it tends to reduce the federal tax bill you pay by up to $1,000 per qualifying child.
And, unlike a tax deduction, a tax credit like this one will reduce your bill directly, dollar for dollar. The extension of the child tax credit is a huge benefit to overstressed and overworked parents who already have been paying significantly into the system, and are in need of a break.
Wait… There’s a Catch
In order to qualify for the tax credit, though, your child must meet all of the following criteria:
- Be your dependent son, daughter, foster child, brother, sister, or a descendant of any of the above
- Be under the age of 17 at the end of the tax year
- Be claimed as your dependent on your tax return
- Have provided less than half of their own financial support in the year
- Have lived with you for more than half of the year
- Be a citizen or national of the United States of America
Some Specific Nuances of the Child Tax Credit
The child tax credit is modified and adjusted based on gross income, as well, and people who make more money may qualify for higher and more significant tax credits to offset a larger tax burden.
Additionally, married, separated and divorced couples are all able to take advantage of the child tax credit, as it applies to any marital and family status, so long as the child meets the above criteria. There are also options for additional child tax credits that are limited by your tax liability, but may be refundable as a portion of the original credit.
The child tax credit is automatically calculated by TurboTax and can be used to determine how much money you will save on your tax bill. Clearly, this credit is the way to go for parents and families, and can save thousands of dollars in credits on a tax bill that otherwise would’ve gone unchecked.
As long as your child or children qualifies for this tax credit, it is a very beneficial thing to have when filing your taxes with the IRS this year. Talk to the folks at TurboTax today, or visit them online to see if you qualify for the child tax credit. It is certainly a great option for any parent! And while you’re there give their easy tax refund calculator a try.