Essential Requirements To Qualify For Child Tax Credit

Essential Requirements To Qualify For Child Tax Credit

The tax could be a significant burden for families who have to feed their children and raise them on low incomes. People have to pay a lot of fees while the growth of their child and could have to face a financial crisis with growing rates of everything. The U.S. designed the American rescue Plan act to provide relief to such people. This also helped many people who got impacted by the COVID-19 pandemic.

The benefits of this act were provided to the taxpayer citizens to reduce the tax they must pay. The primary purpose of this act was to help as many families as possible and increase the financial benefits. Many families have benefited from the American rescue plan act of March 2021 in the United States. Read more about child tax credit on to stay aware of this act’s financial benefit and calculate your child tax credit.

What Is Child Tax Credit And How To Calculate Tax Credit?

The child tax credit is an act that can reduce the number of tax bills you pay significantly. However, to be eligible for a Child tax credit, you must meet all the requirements. The particular requirements on the child tax credit make it possible to provide benefits to people who need them.

Moreover, it helps ensure that the right person is receiving the benefits. For example, you should know that child tax credit was offered to low-income taxpayers. Therefore, it becomes essential that they receive the benefits. You can use the Child Tax Credit Calculator to check your eligibility and see how much credit you can receive from the child tax credit.

Here Are The Top Requirements for child tax credit qualification:

1.     Age Of The Dependent

The dependant should be under 18 at the end of the year. The credit amount may vary depending on the age of the dependant. For example, the child tax credit for a dependant under age 6 is $3,600, and for those under age 18, it is $2000.

2.     Taxpayer’s Relation With Child

 The child should be in your relationship and should belong to you. The dependent child could be your direct blood, stepchild, half-sister/brother, and you can also claim the descendant of these qualifying people, such as nephews, nieces, and grandchild. You can also claim the foster child given to you by authorities or the court.

Moreover, the adopted child is considered your own child if the adoption producer was done lawfully with all the documents. Therefore, you can also get a child tax credit for the adopted one even if the adoption is not final at the end of the year. However, you still need to fulfill other requirements to get a child tax credit for Adopted or other children.

3.     Financial Support From The Dependent 

The dependant should not provide more than 50% of his own income during the tax year. More than 50% of financial support from the child could make you ineligible for a child tax credit. 

4.     Claim The Child As A Dependent

The child should be claimed as dependent by you on your tax returns. The child should be either permanently disabled or a full-time student (for five months a year) and under the age of 19 or 24.

5.     Citizenship Of The Dependant

The child must have to be a U.S citizen, U.S resident alien, or U.S. national. The people outside these regions or people who are not the citizens of America cannot claim the child tax credit. 

6.     Lived With You For More Than Half A Year

The child should have lived with you for over half a tax year. The child born (or died) is eligible for the child tax credit for the entire tax year. The child that is not living with you in certain circumstances like vacation, medical care, or issue.   

7.     Income Of The Family

To qualify for the child tax credit, your annual income should meet the requirements for single parents, $75,000 or for the head of the family, $112,500, and for joint families, $150,000.

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