Child Tax Credit

The child tax credit is one of the most popular methods that a family can use to reduce the amount of federal taxes they are. For each qualifying child, the child tax credit allows you to reduce the amount of federal taxes that you owe by $1,000. This credit will usually be limited by the amount of tax that you owe. For example, if you owe $2,100 in taxes and you have 4 children, then your tax is reduced to $0. It may be the case that you qualify for an additional child tax credit.

So what is a qualifying child? A qualifying child as the following characteristics:

  • U.S. Citizen - the child must be a citizen of the United States
  • Residency - for the year in which are claiming the credit, the child must have lived with you for over half over that year
  • Support - you must have provided over 50% of the child's support
  • Under 17 - the child must have been under the age of 17 years old on the last day of the year that you are filing the credit for
  • Relationship - the child's relationship to you must be one of the following:
    • Daughter
    • Son
    • Adopted Child
    • Step child
    • Any foster child that is eligible
    • Sister
    • Brother
    • Stepsister
    • Stepbrother
    • Can also be a child of any of the ones listed above

The child tax credit also has what is called a phase out range. The phase out range for the child tax credit is as follows. You have to find out what your modified adjusted gross income is. Once you determine that value, then you compare it to the following numbers:

  • Single - $75,000
  • Head of Household - $75,000
  • Qualifying Widow(er) - $75,000
  • Married Filing Separately - $55,000
  • Married Filing Jointly - $110,000