Child Tax Credit Qualifications
Claiming children or dependents on your tax return can have many benefits. Here are eight dependent tax breaks to consider when preparing your taxes:
IRS Child
Tax Credit
Who qualifies as a dependent? Find out with this simple tool before you eFileIT.
This page focuses on the specific details for claiming the Child Tax Credit on your return for your dependent(s). Learn who gets it, how to claim it, and more by following below.
Who Gets the Child Tax Credit?
When you prepare your tax return on eFile.com, we will automatically check to see if you qualify for the Child Tax Credit. The exact amount will be calculated for you and filled out on the Form 8812 in order to get your maximum credit.
Who?
The Child Tax Credit is for children younger than 17 years of age on December 31 and is claimed by the child's parent or guardian on their individual income taxes. The parent or guardian must have earned income of at least $2,500 for the year. For those age 17 or older, you can claim the Credit for Other Dependents. You, your spouse if filing jointly, and the dependent must have a Social Security Number or Individual Taxpayer Identification Number. Here is a list of who could be a qualified person based on your relationship with them for the Child Tax Credit:
Biological child, grandchild, niece or nephew, step-child, a child lawfully placed for legal adoption, adopted child, or a foster child. The child could also be none of the above or not related - you can still claim the credit as long as the child qualifies as your dependent.
What?
The Child Tax Credit is a partially refundable tax credit worth a maximum of $2,000 per qualified person. This IRS credit aims to help reduce the tax burden of those raising children in an effort to offset the many associated expenses
When?
This credit is claimed by filing your income taxes - file from January through October following a given tax year to claim your credit. You only have three years to claim a refund, so it is recommended that you eFileIT by Tax Day to file on time and receive your credit.
Where?
eFileIT right here on eFile.com! eFile takes you through a simple series of questions where you can input your filing status, personal identifying information, income, and dependent details. The online tax filing app then generates all your IRS and applicable state tax forms based on your answers and shows you your full return before you e-file. Never handle a paper form again with eFile.com - start free with no commitment.
Why?
You should claim the Child Tax Credit in order to offset any federal taxes you owe based on your income and filing status. When you work or earn income, taxes are generally withheld, but the CTC can reduce any taxes owed and even increase your tax refund.
How?
The Child Tax Credit is calculated and claimed on IRS Form 8812 - eFile will generate this form for you and e-file it with your return.
Claiming the Child Tax Credit
If you have a qualifying child at the age of 16 or younger as of December 31 of the tax year, you may be able to claim the Child Tax Credit. Part of the Child Tax Credit can be refundable, so it may give you a tax refund even if you don't owe taxes. The qualifying child or children must have a social security number or SSN issued by the Social Security Administration before the tax return or tax extension due date - typically, April 15. See steps to take to obtain an SSN. You must also have earned income of at least $2,500 in order to claim the CTC.
Here are some important facts about the Child Tax Credit:
Use the eFile.com CHILDucator or Child Tax Credit calculator below to help you find out if you are eligible to claim the Child Tax Credit on your next tax return:
Calculate your 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 of the tax year.
- 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. See the free eFile.com DEPENDucator if you are not sure if someone qualifies as a dependent.
- 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 other certain circumstances.
- Support: The child must NOT have provided more than half of his or her own financial support for the year.
Rather than worry about how much of the credit you qualify for, let the eFile platform do the work for you. Report your tax figures, income, and some information about your dependent(s) and the app will determine how much of the credit you qualify for. Sign up for an eFile.com account here so you can prepare and e-file your tax return now.
Additional Child Tax Credit
The Additional Child Tax Credit or 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 $2,500. This refundable portion can be worth up to $1,600.
Important: If you qualify and claim the Additional Child Tax Credit on a tax return, you might get a refund even if you do not owe any tax.
Schedule 8812 is the output form that the eFile Tax App will generate when you file your taxes with eFile.com. It is used to determine if you qualify for the credit and to calculate the amount of the credit you will receive. eFile.com will do all required math and generate the form for you when you prepare your return. Schedule 8812 will be used for the nonrefundable Child Tax Credit, Additional CTC, and the Credit for Other Dependents - eFileIT.
The CTC is a partially refundable tax credit; this means that some of the credit is nonrefundable while some is refundable and the amounts will be reported in two separate sections of your return. A nonrefundable credit means that the credit cannot be used to increase your tax refund or to create a tax refund when you don’t already have one. Refundable tax credits, on the other hand, are treated as dollar-for-dollar payment directly to you. When the total of these credits is greater than the tax you owe, the IRS sends you a tax refund for the difference. See more details on refundable and nonrefundable tax credits.
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.
Child-Related Tax Savings
Here are other ways you can save taxes on raising children:
- Child and Dependent Care Credit: You may be able to claim expenses up to $3,000 for one dependent or up to $6,000 for two or more dependents with the Child and Dependent Care Tax Credit. The credit amount is up to 35% of your expenses, so a maximum credit of $2,100 can be claimed.
- 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.
- Credits and Deductions: Your child may qualify for different education credits or education deductions when enrolled in a qualifying school program.
See what other tax credits and tax deductions may be available to you.
What about dependents over age 16?
If you claim a dependent who is 17 years old or older and thus does not qualify for the CTC, they will generally qualify you for the Other Dependent Credit or ODC. Here is a list of dependents who may qualify:
- Child, grandchild, or stepchild age 17 or older
- Niece, nephew, adopted child, foster child, or other relative over age 16 who lives with you
- Brother or sister, half-brother or half-sister, stepbrother or stepsister, child of your brother or sister, child of your half-brother or half-sister, child of your stepbrother or stepsister, other descendant of your brother or sister, other descendant of your half-brother or half-sister, other descendant of your stepbrother or stepsister
- Parent, grandparent, other direct ancestor, step-parent, foster parent, brother or sister of your parent, son-in-law or daughter-in-law, father-in-law or mother-in-law, brother-in-law or sister-in-law
- Other non-relative dependent who lives with you and qualifies as your dependent.
Advance Child Tax Credit, 2021
The remainder of this page focuses on the enhanced Child Tax Credit and the advance CTC payments for 2021 only. This is archived information which does not apply to any other year tax returns. See these resources to file your 2021 Taxes:
Important: You only have until April 15, 2025 to claim your 2021 Child Tax Credit as part of your 2021 Refund. You also only have until this date to claim a missing third stimulus payment.
Due to the American Rescue plan, the IRS had set up an online page for the Advance Child Tax Credit and began disbursing up to $300 per child in monthly payments in July 2021 for each child 17 and younger that parents claimed for tax purposes. If you generally did not file a tax return, you needed to have filed a 2020 Tax Return so the IRS would have had record of the number of dependents you will claim. Parents or guardians could also enroll via the IRS CTC Update Portal - now defunct. Otherwise, you may not have received the advance payments: claim the full amount of your 2021 CTC by preparing and filing a 2021 Return.
As a result of the American Rescue Plan Act (ARPA) of 2021, the various tax breaks and credits had been changed for 2021. All these changes only applied to 2021.
The credit allowed 17-year-old dependents to qualify and provided up to $3,000 per qualifying child or $3,600 per qualifying child under age 6. The credit was also fully refundable - it has always been a partially refundable credit - and was made more accessible for those without taxable income by removing the $2,500 earnings floor. In other words, you did not need to have any earned income to claim the 2021 credit.
Similarly to the stimulus payments and the Recovery Rebate Credit, you were able to claim a portion of the Child Tax Credit as advance payments. Throughout the year, you may have received payments on a scheduled basis in 2021; you will need to claim the remainder of the credit on your 2021 Tax Return. The IRS issued these in July and continued through December of 2021. Monthly payments gave qualifying taxpayers $300 for dependents under 6 years old and $250 per month for dependents under 17 via direct deposit or by check through the mail.
The maximum income threshold was changed significantly. For Tax Year 2021, single taxpayers were eligible for the full credit if their adjusted gross income (AGI) was at or below $75,000 or $150,000 for married filing jointly. Additionally, the limit for the phaseout was $112,000 for head of household. The amount phased out by $50 per $1000 over the threshold. This was only if taxpayers claim the increased credit - the normal, $200,000 single/$400,000 married filing joint threshold still applied if a taxpayer did not qualify for the increased credit and, instead, claimed the regular credit with pre-ARPA rules.
You may be eligible to receive a fully refundable Child Tax Credit for 2021 if your income is within the above mentioned threshold. Additionally, you have been eligible to claim periodic installments of this payment during the tax year. For 2021, you may have received in advance, 50% of the Child Tax Credit during 2021. You will have to claim the remaining 50% on your 2021 Tax Return.
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