All You Need To Know About The Child Tax Credit For 2020
What is the Child Tax Credit?
The Child Tax Credit is a benefit that helps to reduce the amount of federal income tax owed by parents or guardians of children under the age of 17. It provides a credit of up to $2,000 per qualifying child. The credit is available to both taxpayers who are filing jointly and those who are filing separately. The credit is reduced if the taxpayer’s income is above certain levels and completely eliminated at certain higher levels of income.
Who Qualifies for the Child Tax Credit?
To be eligible for the Child Tax Credit, the child must meet all of the following criteria:
- Be a citizen of the United States or a resident alien.
- Be claimed as a dependent on the taxpayer’s federal income tax return.
- Be under the age of 17 at the end of the tax year.
- Have a valid Social Security number.
- Live with the taxpayer for more than half of the year.
How Much is the Child Tax Credit Worth?
The Child Tax Credit is worth up to $2,000 per qualifying child. The maximum amount of the credit is reduced if the taxpayer’s income is above certain levels and completely eliminated at certain higher levels of income. The credit is also refundable, meaning that if the taxpayer’s tax liability is less than the credit amount, the taxpayer can receive the difference as a refund.
How Do I Claim the Child Tax Credit?
To claim the Child Tax Credit, the taxpayer must file a federal income tax return and complete Form 1040, Schedule 8812. The taxpayer must include the names and Social Security numbers of any qualifying children on the form. The taxpayer must also provide information about their income and other credits or deductions taken.
Additional Child Tax Credit
The Additional Child Tax Credit (ACTC) is a refundable credit that may be available to taxpayers who have at least one qualifying child but do not qualify for the full amount of the Child Tax Credit. The ACTC is worth up to $1,400 per qualifying child, and is based on the taxpayer’s earned income. To claim the ACTC, the taxpayer must file a federal income tax return and complete Form 8812.
What Other Tax Benefits are Available for Families?
In addition to the Child Tax Credit and the Additional Child Tax Credit, there are several other tax benefits available to families with children. These include the Earned Income Tax Credit, the Child and Dependent Care Credit, and the Adoption Credit. Each of these credits is designed to help reduce the tax burden of families with children.
Conclusion
The Child Tax Credit is a valuable benefit that can help reduce the amount of federal income tax owed by parents or guardians of qualifying children. The credit is worth up to $2,000 per qualifying child and may be refundable in certain cases. To claim the credit, the taxpayer must file a federal income tax return and complete Form 1040, Schedule 8812. In addition, the taxpayer may be eligible for the Additional Child Tax Credit and other tax benefits for families with children.