The child tax credit is something many taxpayers have been interested in these past few years. The following are some facts about the credit for those interested in knowing if they qualify:
What Is the Child Tax Credit?
The child tax credit is a special benefit for people who care for children. A taxpayer may be eligible to receive the credit if he or she is caring for a child under the age of 17 at the end of the tax year. Currently, the government is offering advance child tax credit payments to all individuals who qualify. Most families do not have to do anything to receive the funds. They will receive up to 50 percent of the total amount, and they can claim the rest of those funds on their tax return.
Do I Qualify for the Child Tax Credit?
A taxpayer has to pass several qualification areas before he or she can receive the child tax credit. The first qualification is that the individual must have been caring for a child under the age of 17 when the year ends. The child must also be a natural son or daughter, eligible foster child, stepchild, step-sibling or descendant.
The child must have an eligible social security number and be a legal U.S. citizen. Furthermore, the taxpayer must have had the child living with him or her for more than six months out of the year.
Taxpayers must be eligible in the area of finance as well. The eligible dependant must not have taken care of more than 50 percent of his or her care within the year. Furthermore, income limits apply, and they differ depending on which year the taxpayer uses to qualify.
For example, a single person must have earned less than $112,000 in one year to be eligible for the increased child tax credit. They can earn up to $239,999 for partial credit. The amounts are different if the individuals are using the 2020 scale.
Another qualifying factor for the child tax credit is that the child must be an eligible dependant by the IRS’s guidelines. If all the qualifications are met, taxpayers may receive advance payments this new year and request the amount they did not receive when they filed their taxes.
How Much Is the Child Tax Credit?
The amount a taxpayer receives for the child tax credit depends on the year for which he or she files. The amount for 2021 is up to $3,600 for each qualifying child. For years before 2021, the maximum amount was $2,000 for each child.
How Do I Get the Advanced Payment?
Qualifying families do not usually have to do anything to receive the advanced payments for the child tax credit. The IRS calculates those amounts based on the 2020 tax returns. However, the advanced payments are only equal to 50 percent of the total amount. Therefore, the recipient will need to request an additional credit on his or her most recent tax form.
That’s the basic information about the child tax credit. Interested parties can contact the IRS for additional information.
Categorised in: Tax Preparation