The Child Tax Credit (CTC) is a tax benefit provided by the U.S. government to eligible families with qualifying children. It is designed to help alleviate the financial burden of raising children and is a part of the US tax code. Here are some key points to understand about the Child Tax Credit:
1. Eligibility Criteria:
- The taxpayer must have a qualifying child who meets specific criteria. A qualifying child is typically a dependent child under the age of 17 at the end of the tax year.
- The child must be a U.S. citizen, national, or resident alien.
2. Maximum Credit Amount:
- As of the most recent information, the maximum credit amount is $3,600 per qualifying child under the age of 6 and $3,000 per qualifying child aged 6 to 17. These amounts may be subject to change, so it's essential to check the latest tax regulations.
3. Phase-out Limits:
- The credit amount begins to phase out for taxpayers with higher incomes. The phase-out thresholds vary based on filing status, and income levels above these thresholds result in a reduction of the credit.
4. Refundable Portion:
- The Child Tax Credit includes a refundable portion, known as the Additional Child Tax Credit (ACTC). This allows eligible families to receive a refund even if their tax liability is reduced to zero. The ACTC is calculated based on earned income.
5. Changes Due to Legislation:
- Tax laws and regulations, including those related to the Child Tax Credit, may change. It's crucial to stay informed about any updates or modifications to tax legislation.
6. Claiming the Credit:
- To claim the Child Tax Credit, taxpayers need to include relevant information about their qualifying children when filing their annual tax return. This may include providing Social Security Numbers and other details.
It's recommended to consult with a tax professional or use tax preparation software to ensure accurate and up-to-date information when claiming the Child Tax Credit. Tax laws can be complex, and eligibility criteria may vary based on individual circumstances.
To confirm your eligibility and claim the Child Tax Credit, schedule a consultation online with tax attorney Alexandra Sabalier, Esq. at Sabalier Law. We look forward to helping you in claiming all the tax benefits and refunds that you qualify for.