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Today, Optima Tax Relief Lead Tax Attorney, Phil, talks about the Child Tax Credit, breaking down what it is and who qualifies. 

What is the Child Tax Credit? 

The child tax credit is a tax benefit provided by the IRS to parents or guardians who have dependent children. It’s designed to help offset the costs of raising children. Individuals with children under the age of 17 could potentially receive up to $2,000 per eligible dependent. $1,600 of that sum could be eligible for refund in the 2024 filing season. 

Who Qualifies for the Child Tax Credit? 

First, you’ll need to determine the child’s eligibility. The child must meet certain criteria such as: 

  • Relationship: The child must be your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of any of them (such as your grandchild, niece, or nephew). 
  • Age: The child must be under 17 years old at the end of the tax year for which you are claiming the credit. 
  • Support: The child must not have provided more than half of their own support for the tax year. 
  • Dependent: You must claim the child as a dependent on your federal tax return. 
  • Citizenship: The child must be a U.S. citizen, U.S. national, or U.S. resident alien. 
  • Not File Joint Return: The child must not file a joint return with their spouse for the tax year. If they did, they must only file to claim a refund of withheld income tax or estimated tax paid. 

There are also income limitations for the child tax credit. In 2023, eligibility for the child tax credit hinged on your modified adjusted gross income (MAGI). Thresholds were set at $400,000 or less for married couples filing jointly, and $200,000 or less for other filers. However, if your MAGI surpassed these limits, the $2,000 credit was gradually reduced by $50 for every additional $1,000 over the threshold. 

If you’re unsure about your eligibility for the child tax credit, consider asking for help from a tax professional.  

If you need tax help, contact us today for a Free Consultation.