What Is The Child Tax Credit?

Here are some important facts about the Child Tax Credit:

  • The Child Tax Credit is intended to offset the many expenses of raising children.
  • The Child Tax Credit can be worth as much as $1,000 per child for 2013 and later Tax Years.
  • For 2014, the Child Tax Credit is at least partially refundable if you had an earned income of more than $3,000 (see the Additional Child Tax Credit). This refundable portion of the credit will expire at the beginning of 2017. 
  • For 2014, the Child Tax Credit begins to phase out (decrease in value) at an adjusted gross income of $75,000 for Single filers and Heads-of-Household, $110,000 if Married Filing Jointly, and $55,000 if Married Filing Separately.
  • When figuring your income for the purposes of the Child Tax Credit, you must include any foreign income exclusions.

Do I Qualify for the Child Tax Credit?

This tax educator tool will help you find out if you are eligible to claim the Child Tax Credit on your 2014 Tax Return.

Can I Claim the Child Tax Credit?

Who Is Eligible to Claim the Child Tax Credit?

To qualify for the Child Tax Credit, you must have a child or dependent who meets all of the following requirements:

Age:

The child must have been 16 or younger on December 31.

Citizenship:

The child must be a United States citizen, a United States national, or a resident alien.

Dependent:

The child must be claimed as a dependent on your tax return.

Relationship:

The child must be related to you in one of the following ways: son, daughter, stepson, stepdaughter, brother, sister, stepbrother, stepsister, grandchild, niece, or nephew. This includes any legally adopted child, any child lawfully placed with you in preparation for adoption, and any foster child lawfully placed in your care.

Residency:

The child must have lived with you for more than half of the year (stayed with you for at least 183 nights). Temporary absences for special circumstances are generally acceptable, and special rules may apply if you are divorced or for certain other circumstances. For more details, please see Publication 972, Child Tax Credit.

Support:

The child must NOT have provided more than half of his or her own financial support for the year.

Who Is Eligible for the Additional Child Tax Credit?

The Additional Child Tax Credit (ACTC) is a refundable credit that you may receive if your Child Tax Credit is greater than the total amount of income taxes you owe, as long as you had an earned income of at least $3,000.

Form 1040 (Schedule 8812) efile it, Additional Child Tax Credit, is used to figure out if you qualify for the credit and to calculate the amount of the credit you will receive. The eFile tax software will do all required math and generate the form for you.

For more information on the Child Tax Credit, please consult Publication 972 - Child Tax Credit.

What If a Child Is Claimed as a Dependent on More than One Tax Return?

Only one taxpayer (or married couple filing jointly) may claim any one child for the purposes of the Child Tax Credit and the Additional Child Tax Credit. If a child is claimed as a dependent on more than one tax return, the IRS will determine who gets the claim according to a set of tiebreaker rules.

Learn what happens when a child is claimed by more than one person as a dependent.

Other Child-Related Tax Savings:

Exemptions: You will be able to claim a standard exemption for each qualifying child.

Child and Dependent Care Credit: You may be able to deduct up to $3,000 for one dependent, or up to $6,000 for more than one dependent with the Child and Dependent Care Tax Credit.

Adoption Tax Credit: If you adopted a child, or if you are in the process of adopting a child, you may qualify for the Adoption Tax Credit.

Filing Status: If you are unmarried and your child lived with you for more than half of the year, you may qualify for a higher standard deduction and lower tax rates by filing as Head-of-Household.

How Do I Claim the Child Tax Credit?

When you prepare your tax return on efile.com, our online tax software will automatically check to see if you qualify for the Child Tax Credit. If you qualify for the credit, the efile.com software will then calculate the exact amount of your credit for you. The software will also help you select the right form and fill it out in order to get your maximum credit amount.

See what other tax credits and tax deductions may be available to you.

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