Search

Child Tax Credit Eligibility: What You Need To Know

People with kids under 17 may be eligible to claim a tax credit of up to $2,000 per qualifying dependent when they file their 2022 tax returns for 2023. How can you qualify for Child Tax Credit in 2023? Read on to know more!
child tax credit eligibility
Child Tax Credit Eligibility: What You Need To Know
Tax season is on and everyone is busy filing their returns and finding ways to get respite from the heavy sums that might need to be paid. One popular way to find some relief is to check if you qualify for Child Tax Credit in 2023. Read on to know more.
In this article

Tax season is on and everyone is busy filing their returns and finding ways to get respite from the heavy sums that might need to be paid. As parents or caregivers of children, you might have some relaxation because of the child tax credit that the central government gives you and this is how to check if you qualify. 

In 2023, the central government raised the age bar for children to 17 years but the credit limit has been lowered. The child tax credit is a federal tax benefit that is important in providing financial support for American taxpayers with children so it is essential to understand how you qualify for it. People with kids under 17 may be eligible to claim a tax credit of up to $2,000 per qualifying dependent when they file their 2022 tax returns for 2023. The refundable child tax credit amount has been set at $1500 and this is how to check if you qualify for it.

Understanding Child Tax Credit in 2023

When you file your taxes, you are required to prove to the IRS that you have an added responsibility for children. You fall under the category of people who find it tough to incur educational and other child-related expenses.  If you plan to claim the credit then the CTC, i.e, the child tax credit may come in handy to you. It is a tax benefit granted to taxpayers for each qualifying dependent child, under the age of 17. 

The credit amount you receive depends upon your income threshold. If your income limit crosses the ceiling you may not be eligible for a 100% credit amount. Or you may be deemed ineligible for the child tax credit. 

How Can Child Tax Credit Benefit You?

The child tax credit has been considered a boon by parents and guardians with kids. Rising education fees, high inflation rates, and hefty medical expenses make it extremely difficult to bring up children. The child tax credit helps in several ways to give parents and caregivers relief. 

  • It helps to reduce taxpayers’ tax liabilities.
  • It is designed to aid taxpayers to support their families.
  • It can be used to satisfy the educational needs of the kids.
  • It may be used to facilitate enhancing desired skills and pursuing hobbies.

Eligibility Criteria for Child Tax Credit

Taxpayers can claim child tax credit for the 2022 tax year when they file their tax returns in 2023. The following are checkpoints you need to clear to be eligible for Child Tax Credit.

  1. Age: The age limit has been set to 17. A child above the age of 17 will not be considered while granting the credit.  
  2. Relationship: The child you’re claiming must be your son, daughter, stepchild, foster child, brother, sister, half-brother, half-sister, stepbrother, stepsister, or a descendant of any of those people (Example: a grandchild, niece or nephew).
  3. Dependent status: You must be able to properly claim the child as a dependent. The child also cannot file a joint tax return. Unless they file it to claim a refund of withheld income taxes or estimated taxes paid.
  4. Residency: The child you’re claiming must have lived with you for at least half the year. (Exceptions to this rule exist).
  5. Financial support: It is mandatory for you to provide at least 50% of the child’s expenses for the past year. In other words, if your qualified child financially supported himself/herself, or someone else took the responsibility for their finances for more than six months, they’re likely to be considered ineligible.
  6. Citizenship: As per the IRS, your child must be a “US citizen, US national or US resident alien” and must hold a valid Social Security Number.
  7. Income: There is a set income limit and parents or caregivers falling under that specific income bracket are only considered for the child tax credit. If you are claiming the credit, you should make sure that you adhere to certain income requirements. Depending on how much your income exceeds that threshold, the credit gets incrementally reduced until it is eliminated.

State Child Tax Credits

Certain states, like California, New York and Massachusetts, propose their own state-level CTCs. You can claim this while filing your state return. Visit your state’s Department of Taxation website for more details.

How to Claim Child Tax Credit

You can claim child tax credit on your Form 1040 or 1040-SR. Moreover, you will also need to fill out Schedule 8812 (“Credits for Qualifying Children and Other Dependents”). This has to be submitted along with your 1040. This schedule will help you to figure out your child’s tax credit amount. If applicable, it will tell you how much of the partial refund you may be able to claim.

Most quality tax software guides like Beem help you through claiming the child tax credit. All you need to do is answer a few simple questions. Then, let the software do the rest of the process on your behalf. If you want to make your tax filing process seamless, use Beem’s Tax Calculator to estimate your Federal and State taxes and avail maximum refunds. 

Was this helpful?

Did you like the post or would you like to give some feedback? Let us know your opinion by clicking one of the buttons below!

👍👎

Author

Picture of Fatema Yusuf

Fatema Yusuf

A passionate writer, who loves to write about anything and everything. She usually writes about finance and investment options. She enjoys talking about personal development and loves to help people grow. she loves to cook for kids and upcycle old stuff to give them a new life.

Editor

This page is purely informational. Beem does not provide financial, legal or accounting advice. This article has been prepared for informational purposes only. It is not intended to provide financial, legal or accounting advice and should not be relied on for the same. Please consult your own financial, legal and accounting advisors before engaging in any transactions.

Related Posts

game-show
Taxes on Game Show Winnings, Lottery and Online Gaming
Winning at least $600 is likely to result in a 1099-MISC tax form being sent by the awarding entity to both the winner and the IRS. If no form is received, the winner is still obligated to report the winnings value.
Cheatham Tax Deadline Extension
Cheatham Tax Deadline Extension [2024]
The tax extension applies to individuals and businesses in Cheatham county and other affected areas impacted by the severe storms and tornadoes.
Davidson Tax Deadline Extension
Davidson Tax Deadline Extension [2024]
The tax deadline extension in Davidson County, Tennessee, relieves businesses and individuals affected by the severe weather. Here are the key details that you must know before starting your tax filing process in Davidson County.
Washington Tax Deadline Extension
Washington Tax Deadline Extension
Understanding the new deadlines and the procedure for applying for extensions is crucial to complying with the regulations and avoiding any penalties. Read on for all the details.
Tennessee Tax Extension Deadline
Tennessee Tax Extension Deadline 
Tennessee taxpayers can utilize various methods to fulfill their state tax obligations. Read on for all the details.
Michigan Tax Extension Deadline
Michigan Tax Extension Deadline 
In 2023, severe storms, tornadoes, and flooding led to federal disaster declarations in several Michigan counties. These declarations allowed affected taxpayers extended deadlines to file and pay their taxes, providing critical relief as they work towards recovery. Read on for more information.
Features
Essentials

Get up to $1,000 for emergencies

Send money to anyone in the US

Ger personalized financial insights

Monitor and grow credit score

Save up to 40% on car insurance

Get up to $1,000 for loss of income

Insure up to $1 Million

Coming Soon

File federal and state taxes at low cost

Quick estimate of your tax returns

Get up to $1,000 for emergencies

Send money to anyone in the US

Save big on auto insurance - compare quotes now!

Zip Code:
Zip Code: