American Tax Service

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The Child Tax Credit & Additional Child Tax Credit

One of the most beneficial and popular federal tax credits is the Child Tax Credit. This is a nonrefundable tax credit, and it’s worth up to $2,000 per qualifying child.

Who is Considered a Qualifying Child?

child tax credit additionalThe IRS considers a qualifying child to be a child that meets all of the criteria below:

  • Under the age of 17 at the end of the year
  • Has resided with you for more than half of the year
  • Is your dependent on your federal taxes
  • Is a US citizen and has a valid SSN
  • Is a relative such as your child, sibling, stepchild, stepsibling, foster child, legally adopted child, or a descendant from any of the previously mentioned individuals.

Income Limits

The amount of the credit that you receive is based on your adjusted gross income. Below is the current phase-out amounts.

  • Single, Head of Household or Qualifying Widow (er) – $75,000
  • Married filing separately – $55,000
  • Married filing jointly – $110,000

How to Claim the Child Tax Credit

In order to claim the child tax credit, you have to make sure that your child is considered a qualifying child. You also have to list them as a dependent on Form 1040. You will claim the Child Tax Credit on Form 1040

In order to calculate the amount of the credit, you have to fill out the Child Tax Credit Worksheet. This worksheet is automatically provided when you prepare your taxes online.

The Additional Child Tax Credit

The Child Tax Credit is non-refundable, which means it can only be used to bring your tax liability to zero. However, you may be able to receive a portion of the credit that you could not use by claiming the Additional Child Tax Credit.

This tax credit is available so taxpayers can take advantage of the unused portion of the Child Tax Credit. The majority of the time, it is equal to the unused portion of the Child Tax Credit up to 15% of your earned income that is more than $3000.

The Additional Child Tax Credit is refundable, which means you will receive the amount awarded in the form of a tax refund. You claim this credit on Form 1040.

Keep in mind, it’s easy to claim the child tax credit if you file with H&R Block Online.