Tax Tools

How does the Child Tax Credit work?

The Child Tax Credit (CTC) is now a fully refundable tax credit that you may be eligible to take for each qualifying child you carry on your federal tax return.

The American Rescue Plan, signed into law in 2020, drastically changed the way Child Tax Credit (CTC) works. One of the biggest changes was the min. earned income requirement – prior to 2020, a min. of $2,500 of earned income was required and the refundable portion was 15% of the earned income above $2,500 (for a maximum of $1,400 /child). The credit is now fully refundable and there is no min. earned income required. The credit also increased from $2,000 to a maximum of up to $3,600 per qualifying child under 6 years of age and $3,000 for children 6 to 17 (age rule was previously under 17). CTC is first used to offset any taxes owed on your tax return; however, any remainder amount after taxes are paid becomes refundable. And if you have zero tax liability, the entire credit is fully refundable. What’s more, starting in 2018, you could receive a personal tax credit of up to $500 for other qualified dependents in your household.

You have enough on your plate with juggling home, work and caring for your children – sit down with one of our Tax Pros and you’ll be glad you did! Our Tax Preparation Experts are IRS certified and go through a rigorous training process to insure accuracy, satisfaction and maximum refund – guaranteed!

Use our easy CTCulator to find out if you qualify to claim the Child Tax Credit on your tax return.

Child Tax Credit Calculator

How many dependents – ANY AGE - are you claiming on your current tax return?

(Enter number of children inside of box)

How many dependents – UNDER 6 YEARS OLD - are you claiming on your current tax return?

(Enter number of children inside of box)

How many dependents – BETWEEN 6 to 17 YEARS OLD - are you claiming on your current tax return?

(Enter number of children inside of box)

What is your – MODIFIED ADJUST GROSS INCOME (MAGI) - for current tax year?

(Enter Income inside of a box)

What is your – FILING STATUS- for current tax year?
Choose one:

Congrats!

Based on the info you provided, you may qualify for the following:

Child Tax Credit (CTC): up to $
- Refundable CTC: up to $
Other Dependent Credit: up to $
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Sorry,

based on the information you provided, you cannot claim the Child Tax Credit.

However, you may eligible for other credits & deductions.

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Qualifying Child Rules & Assumption for the CTCulator

  • The earned income threshold for the refundable credit is lowered to $2,500.
  • The beginning credit phaseout for the child tax credit increases in 2018 to $200,000 ($400,000 for joint filers).
  • The qualifying child must not provide more than half of his or her own support
  • You must be able to claim the qualifying child as a dependent on your tax return (must meet all 4 tests in order to claim your child as a dependent – see your preparer for more info)
  • The CTCulator does not take into account any exclusion of income from Puerto Rico and Foreign Earned Income from the following forms: 2555 Lines 45&50; 2555-EZ Line 18 and 4563 Line 50
  • The qualifying child must be a U.S. citizen, a U.S. national or a U.S. resident alien.
  • Qualifying Child: Relationship to child must be son or daughter, a stepchild, brother or sister, stepbrother, stepsister and any of their descendants. A foster child must be placed with you by a court or authorized agency. An adopted child is always treated as your own child.
  • Qualifying Other Dependent: All of the "Qualifying Child" relationships above for ages over the of 16 and other relatives including mother, father, grandparents, aunt, uncle, brother-in-law, sister-in-law, daughter-in-law, son-in-law, son or daughter of your half-brother or half-sister or any member of your household that lived with you all year.
  • The child cannot file a joint return (or file it only to claim a refund).

Qualifying Child Test must meet all 6 tests below:

  • Age Test: The child was under age 17 (so 16 or younger) at the end of the tax year.
  • Relationship Test:  The child is your daughter, son, stepchild, foster child, adopted child, brother, sister, stepbrother, stepsister, half-sister or half-brother. The child can also be the direct descendant of any of those just mentioned (e.g. your grandchild, niece or nephew).
  • Support Test: The child did not provide more than half of their own "support." This is money they use for living expenses. The child also cannot file a joint return that year.
  • Dependent Test: The child must be claimed as your dependent on your federal tax return.
  • Citizenship Test: The child must be a U.S. citizen, a U.S. national or a U.S. resident alien. For the 2018 tax year, the child must also have a Social Security Number.
  • *Resident Test: The child must have lived with you for more than half of the tax year. (*exception - temporary absences by you or the child for special circumstances, such as school, vacation, business, medical care, military services or detention in a juvenile facility, are counted as time the child lived with you)

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