The child tax credit is a tax credit offered by the United States government to parents or guardians of dependent children under the age of 18. This credit was introduced as part of the Taxpayer Relief Act of 1997, and has since undergone numerous changes to the eligibility criteria and amount offered. In this post, we will discuss the current state of the child tax credit, including eligibility criteria, the amount offered, and how to claim it.
Eligibility Criteria
To qualify for the child tax credit, the child in question must meet several eligibility criteria. First, the child must be under the age of 18 at the end of the tax year in question. Second, the child must be a U.S. citizen, national, or resident alien. Third, the child must be claimed as a dependent on the taxpayer's tax return. Fourth, the child must have lived with the taxpayer for more than half of the tax year. Finally, the taxpayer must have provided at least half of the child's support during the tax year.
Amount Offered
The amount of the child tax credit has varied over time, but the current amount is $3,600 per child under the age of 6 and $3,000 per child between the ages of 6 and 17. The credit is fully refundable, which means that even if the taxpayer does not owe any taxes, they can still receive the full amount of the credit. Additionally, the credit is now available in monthly installments of up to $300 per child, beginning in July 2021 and continuing through December 2021. This change was made as part of the American Rescue Plan Act of 2021, and is intended to provide families with more immediate financial relief.
Claiming the Credit
To claim the child tax credit, taxpayers must include Form 8812, Additional Child Tax Credit, with their tax return. This form requires information about the child in question, including their name, social security number, and relationship to the taxpayer. The form also requires information about the taxpayer's income and taxes paid, as well as any other credits or deductions claimed on their tax return. Taxpayers who are eligible for the credit in 2021 may also choose to receive monthly payments of the credit rather than waiting until they file their tax return in 2022.
Conclusion
The child tax credit is a valuable benefit offered by the U.S. government to parents and guardians of dependent children. The credit has undergone numerous changes over time, including an increase in the amount offered and the availability of monthly payments. While the child tax credit may not fully offset the costs of raising a child, it can provide significant financial relief to families who are struggling to make ends meet. For more information on the child tax credit and how to claim it, taxpayers can consult the IRS website or speak with a tax professional.