About the Child Tax Credit

Jan 18, 2024

Child Tax Credit

There are many details to keep in mind when tax season comes around. Understanding which credits you qualify for is an important part of tax planning, as credits can reduce your overall tax liability. If you have children, you may qualify for the Child Tax Credit. Here are answers to some common questions about this family-friendly tax break.

What Is the Child Tax Credit?

The Child Tax Credit is a tax benefit for families whose children meet certain criteria. As a credit, this tax break can reduce the amount you owe in taxes dollar for dollar up to $2,000.

The Child Tax Credit is nonrefundable. This means that if the amount of the credit is greater than your tax liability, then you will not owe taxes. However, you will not be able to get a refund for the difference.

Who Qualifies for the Credit?

To qualify for the 2023 tax year, dependents must be related to you as follows:

  • Your child (including adopted children), stepchild, or foster child; or
  • Your sibling, stepsibling, or half-sibling; or
  • A descendant of a qualifying relation, such as a niece, nephew, or grandchild.

They must also:

  • Be under 17 years old at the end of the year;
  • Be claimed as a dependent on your tax return;
  • Have lived with you for at least six months;
  • Be a U.S. citizen, national or resident alien;
  • Not file their own joint tax return with a spouse (unless they file jointly solely to claim a refund of any taxes already paid through withholding or estimated tax payments); and
  • Not have contributed more than half the amount required to support them financially to the household.

As the person filing the taxes, keep in mind:

  • Your annual income must not exceed $200,000 ($400,000 if filing jointly) to claim the full credit amount.
  • If you have a higher income, you may be eligible to claim a partial credit.

If you’re not sure you and your family meet the criteria, use the IRS Interactive Tax Assistant tool to see if you qualify.

If your child doesn’t qualify for the Child Tax Credit, you may be able to take advantage of the Credit for Other Dependents. This credit carries no age restriction, and the maximum amount per dependent is $500. Other criteria apply, but it is less stringent.

How Do You Claim the Child Tax Credit?

When filing your taxes, make sure you:

What Is the Additional Child Tax Credit?

If you owe less than the amount of the Child Tax Credit, you may be able to claim the Additional Child Tax Credit. This is a refundable credit worth a maximum of $1,600 per qualifying dependent that can cover the unused balance of your Child Tax Credit.

To find out if you can claim the Additional Child Tax Credit, check your calculation for line 16a on Schedule 8812.

Note: If you file Form 2555, then you can’t claim the Additional Child Tax Credit.

Are There Other Tax Credits for Families?

Several other family-focused tax benefits are worth exploring, including:

For insights tailored to your specific situation, schedule an appointment with one of our tax professionals. We can help you manage your taxes so you can focus on your family.

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