The Taxpayer Relief Act of 1997 first introduced the Child Tax Credit (CTC)
, which is
intended to ease the tax burden of families with children. The credit is worth up to $1,000 for each eligible child under 17, and is taken as a reduction
from a family's final tax bill for the year. If a family's income is low enough that they do not owe any federal income tax, they may still receive all or
a portion of their CTC balance in the form of an
Additional Child Tax Credit. Families with higher income receive a smaller CTC, and
families with income over $150,000 are not eligible. The CTC is distinguishable from the child and dependent care credit
and the earned income credit (EIC)
Who qualifies as an 'eligible child' for the Child Tax Credit?
There are 7 requirements each child must meet to qualify as an eligible child for purposes of the CTC:
- Must be under age 17 (still 16) at the end of the relevant tax year (age requirement);
- must be your child, a stepchild, or a legal foster child (relationship requirement);
- must not have provided more than half of his or her own financial support during the tax year (support requirement);
- must qualify and be claimed as a dependent on your tax return (dependent requirement);
- must be a US citizen, US national or US resident alien (citizenship requirement);
- must have lived with you for at least half of the relevant tax year (residence requirement); and
- must not have filed a joint return for the tax year (or only filed as a claim for a refund).
Make sure you file the right form to receive the Child Tax Credit
If you file your federal tax return using Form 1040EZ or Form 1040NR-EZ, you cannot claim the CTC. Make sure you use Form 1040, Form 1040A or Form 1040NR
to retain your CTC eligibility.
You will need to complete your appropriate federal tax form before you can calculate the amount of your Child Tax Credit, if any. Once you have finished
your forms, calculate your Child Tax Credit using IRS Publication 972.
Note: this information is accurate with regard to 2013 federal returns.