2020 Child Tax Credit: A Parent'S Guide To Understanding And Applying For The Credit
The 2020 Child Tax Credit can be a great way for parents to get back some of the money they have spent on raising their kids. With the credit, parents can receive up to $2,000 per qualifying child and up to $500 per qualifying dependant. In this guide, we will explain what the credit is, who is eligible, and how to apply for it.
What is the 2020 Child Tax Credit?
The 2020 Child Tax Credit is a tax credit available to parents or guardians of dependent children who are under the age of 17. This credit can be claimed for each qualifying child, and the amount of the credit can vary depending on the child's age and other factors. The maximum amount of the credit is $2,000 per qualifying child and up to $500 per qualifying dependant. The credit can be used to reduce the amount of taxes owed by the taxpayer.
Who is Eligible for the Credit?
In order to be eligible for the 2020 Child Tax Credit, the dependent child must meet certain criteria. The child must be younger than 17 years old at the end of the calendar year, and the taxpayer must be the parent or legal guardian of the child. In addition, the child must be claimed as a dependent on the taxpayer's tax return, and the taxpayer must have a valid social security number for the child. The taxpayer must also meet certain income requirements in order to be eligible for the credit.
How to Claim the Credit
In order to claim the 2020 Child Tax Credit, the taxpayer must fill out the appropriate form when filing their taxes. The form is available on the Internal Revenue Service (IRS) website. The taxpayer must provide information such as the child's social security number, the child's age, and the taxpayer's income. Once the form is completed and submitted, the IRS will determine the taxpayer's eligibility for the credit and the amount of the credit they can claim.
Understanding the Credit
It is important for taxpayers to understand the details of the credit in order to properly claim the credit. The credit is nonrefundable, meaning that it can only be used to reduce the amount of taxes owed. In addition, the credit is subject to phaseouts depending on the taxpayer's income. This means that the credit may not be available to taxpayers with higher incomes.
Income Limitations
The income limitations for the 2020 Child Tax Credit vary depending on the taxpayer's filing status. For single taxpayers and married couples filing jointly, the income limitation is $200,000. For married taxpayers filing separately, the income limitation is $100,000. For head of household taxpayers, the income limitation is $200,000. If the taxpayer's income is above the income limitation, they may not be able to claim the full amount of the credit.
Additional Benefits
In addition to the 2020 Child Tax Credit, the IRS offers other credits that can be claimed by parents of dependent children. The Earned Income Tax Credit and the Additional Child Tax Credit are two other credits that can be claimed by qualifying taxpayers. These credits can provide additional tax savings, so it is important to explore all of the available credits.
Applying for the Credit
In order to claim the 2020 Child Tax Credit, the taxpayer must fill out the appropriate form when filing their taxes. The form is available on the Internal Revenue Service (IRS) website. After the form is completed and submitted, the IRS will determine the taxpayer's eligibility for the credit and the amount of the credit they can claim. The credit can be a great way for parents to get back some of the money they have spent on raising their kids.
Conclusion
The 2020 Child Tax Credit can be a great way for parents to get back some of the money they have spent on raising their kids. With the credit, parents can receive up to $2,000 per qualifying child and up to $500 per qualifying dependant. In order to be eligible for the credit, the child must meet certain criteria, and the taxpayer must meet certain income requirements. The credit can be claimed when filing taxes, and understanding the details of the credit can help taxpayers maximize their tax savings.