The Child Tax Credit is an important tax credit that may be worth as much as $1,000 per qualifying child depending upon your income.
With the Child Tax Credit, you may be able to reduce your federal income tax by up to $1,000 for each qualifying child under the age of 17.
A qualifying child for this credit is someone who meets the qualifying criteria of six tests: age, relationship, support, dependent, citizenship, and residence.
- Age Test - To qualify, a child must have been under age 17 – age 16 or younger – at the end of the tax year.
- Relationship Test - To claim a child for purposes of the Child Tax Credit, they must either be your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister or a descendant of any of these individuals, which includes your grandchild, niece or nephew. An adopted child is always treated as your own child. An adopted child includes a child lawfully placed with you for legal adoption.
- Support Test - In order to claim a child for this credit, the child must not have provided more than half of their own support.
- Dependent Test - You must claim the child as a dependent on your federal tax return. You must provide the name and identification number (social security number or ITIN ) on your tax return for each qualifying child.
- Citizenship Test - To meet the citizenship test, the child must be a U.S. citizen, U.S. national, or U.S. resident alien.
- Residence Test - The child must have lived with you for more than half of the tax year.
The credit is limited if your modified adjusted gross income is above a certain amount. The amount at which this phase-out begins varies depending on your filing status.
IRS Publication 972, Child Tax Credit