Here's what you need to know about the CTC, Child Tax Credit, and the refundable portion, the ACTC, Additional Child Tax Credit.
- Know that the CTC is up to $1,000 per qualifying child.
If you claim the nonrefundable child tax credit but do not qualify for the full amount, you may also be able to take the refundable ACTC. You must meet various criteria regarding the qualifying child.
- Know that you can’t take the refundable portion of the Child Tax Credit if you or your spouse (if filing a joint return) file a Form 2555 or Form 2555EZ (related to excluding foreign earned income)
Know who is a qualifying child. The child must:
- Be under 17 at the end of the tax year
- Meet the relationship and residency tests for uniform definition of a qualifying child, see Understanding What is a Qualifying Child
- Not provide more than half of his or her own support for the tax year
- Have lived with you for more than half the tax year (see Publication 972, Child Tax Credit, for exceptions for birth or death during the year, temporary absences, kidnapped or missing or children of divorced or separated parents)
- Be claimed as a dependent on your return
- Not file a joint return for the year (or filed the joint return only to claim a refund of taxes withheld or estimated taxes)
- Be U.S. citizen, U.S. National or a U.S. resident alien (To be treated as resident of the U.S., a child generally needs to meet the requirements of the substantial presence test see Publication 519, U.S. Tax Guide for Aliens, for more information)
- Know the limits on the credit
- You can't take the part of the CTC left after it reduces your tax to zero unless you qualify for the ACTC
- The CTC is reduced if your MAGI, modified adjusted gross income is above the amount listed below by filing status:
- Married filing jointly - $110,000
- Single, head of household or qualifying widow or widower--$75,000
- Married filing separately - $55,000
- Many people who qualify for the Earned Income Tax Credit also qualify for CTC and ACTC but know the important differences
- For CTC, the qualifying child must be under age 17; the age limits for EITC are higher and there is no age limit for a child who is totally and permanently disabled
- For EITC, the child must have a Social Security number that is valid for employment but a child with an ITIN may qualify for CTC but must meet the substantial presence test, Be admitted for lawful permanent residence or make a first year election (see Instructions for Schedule 8812 for more information)
- To claim the CTC for a child with an ITIN, you must complete Part I of the Schedule 8812 and complete Part II to IV to claim the ACTC
- Know how to Avoid Common ACTC Errors and keep good records
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Forms and Publications
Publication 972, Child Tax Credit
Schedule 8812, Child Tax Credit
Publication 4298, EITC, efile and Child Tax Credit Poster
What other resources do we have for you? Check out the EITC Central and Other Refundable Credits welcome page
MAGI, modified adjusted gross income, for most people is the amount of AGI, adjusted gross income, shown on your tax return. On Form 1040A, AGI is on line 22 and is the same as MAGI. If you file Form 1040, AGI is on line 38 and you add back the following:
- Foreign earned income exclusion,
- Foreign housing exclusion,
- Foreign housing deduction,
- Exclusion of income by bona fide residents of American Samoa, and
- Exclusion of income by bona fide residents of Puerto Rico.