Yahoo Finance Child Tax Credit: Everything You Need To Know Before You File Your 2023 Taxes
The child tax credit (CTC) is a nonrefundable tax credit available to taxpayers with dependent children under the age of 17. The maximum tax credit per qualifying child is $2,000, while the maximum for the additional child tax credit (ACTC) is $1,600 per qualifying child — at least for tax year 2023. The ACTC is the refundable portion of the CTC, and holds its own requirements.
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According to the IRS, taxpayers must meet several requirements to qualify for the CTC, including:
Be a parent or guardian who is filing taxes in 2024.
Have a dependent under 17 years of age.
The dependent must either be your son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister or a descendant of one of these (for example, a grandchild, niece or nephew).
They must have a Social Security number.
They must provide no more than half of their own financial support during the year.
They lived with you for more than half the tax year.
If you owe the IRS less than the qualified CTC amount, then you can claim the additional child tax credit. The ACTC cannot be claimed if you file Form 2555 or Form 2555-EZ, excluding foreign earned income.
The CTC and ACTC decrease if the parent or guardian’s gross income exceeds $200,000 when filing individually, or $400,000 if filing a joint return. However, higher-income families may be eligible to claim a partial credit.
To claim the credit, list your children and other dependents on Form 1040 and attach a completed Schedule 8812.
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Some States Have Separate CTC
Some states have also created their own permanent child tax credit.
Vermont passed a new $1,000 CTC that applies to families with children under six. Vermont is one of 14 states that now have a CTC, NPR reported, and 10 of them either created or expanded the benefit in 2023. Notably, 11 states offer the full credit to households with very low or no income.
NPR indicated that many families who qualify for the new child tax credits may not make enough to pay taxes and may not be used to filing a tax return. States are now focusing on getting the word out and ensuring families file a tax return.
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This article originally appeared on GOBankingRates.com: Child Tax Credit: Everything You Need To Know Before You File Your 2023 Taxes
