How To Calculate A Child Tax Credit
Figuring out how to calculate a child tax credit can be difficult at first. There are ten guidelines for claiming the child tax credit. Your child must be considered a dependent who is under seventeen years old. There are also certain income guidelines you must reach in order to qualify. The best way to figure out whether or not your child qualifies, you should visit the IRS website. The IRS website gives you all of the information for determining whether you are eligible for the child tax credit. This credit can really help you out at the end of the tax year because it’s worth up to $1000. There are other credits available that take your child’s expenses into account too. The IRS offers a credit for child care payments also. All in all these tax credits can give you a pretty nice return, especially if you have multiple children. You cannot make more than $110,000 (jointly) to claim the child tax credit though, but other credits may be available to you. The best thing to do is first visit the IRS website to determine whether you qualify and if you don’t, head to an accountant to see what other benefits you can claim on your next return.
- Go through each child tax credit requirement. All of the conditions listed must be met.
- Does your child meet the age requirement? They must be under seventeen years old to qualify. This is because the child tax credit is only for children that live at home.
- Your child must rely on you for more than half of their support. This means at least 51 percent of their expenses must be paid by you. If a sixteen year old happened to find a great job that pays for 51 percent of his or her income, they would no longer qualify.
- The child must qualify as a dependent. There is a separate test for determining whether a child is a dependent. Usually as long as they live with you and you have custody, they are considered your dependent.
- The child must have lived with you for at least half of the year. There are exceptions to this policy, if say your child goes to school abroad, or lives with another parent part of the time. If you share custody, whoever is the sole managing conservator can claim the child. Usually a judge will decide where the primary residence will be and that is who gets to claim the tax credit.
- The child must be a U.S. Citizen.
- You must meet the income requirements. If you are filing jointly, you may earn up to $110,000. However, if you live alone and are a head of household, you may only earn up to $75,000. These guidelines are in place to give tax credits to middle and low income families who need the child tax credit. There are income exceptions that you may apply for, but those income standards are the basic guidelines.
- Check with the IRS website to get any additional information on the child tax credit. The value of this credit is $1,000 per qualifying child. There are additional tax credits related to children so make sure you have an accountant go over your taxes. You may also be able to claim child care expenses too.