Most Americans with children go through a lot, mostly financial challenges. If you are one of the citizens, and you are working, you can enjoy tax credits and deductions that can help ease your financial burden. One of the tax credits you can claim is the child tax credit. You can be eligible for this tax credit if you have a dependent child aged 16 years or younger. Do you want to learn more about this tax credit? Continue reading.
What is child tax credit?
This is a refundable tax credit for parents earning low to moderate incomes, and have dependent children. Although, this tax credit is confused with child and dependent care credit, they are completely different. The credit is lucrative and can significantly reduce your taxes and even get some refund if there is anything left over.
Child or dependent the credit can be claimed for
First of all, you can claim for child tax credit if you have your own child be it your daughter or son. Also, the dependent child can be a stepchild, adopted child, brother, sister, grandchild, nephew or niece. Besides that, the child you can claim for the credit must be 16 years or younger. In addition, the child must be a citizen or resident alien of the USA. Also, you must prove that the dependent child is dependent on you, and you provide half of his or her financial support.
How much child tax credit can you get?
If you meet all the requirements set, you can claim for up to $2,000 per dependent child. However, the child must qualify for the set standards such as aged 16 years or below, and more. This amount of tax credit is refundable can can even reduce your tax bill significantly. However, the tax credit varies with your income, and amount you spend on supporting the dependent child. But for accurate calculation, you can use dependent tax credit calculator to know how much you can get or entitled to.
How to qualify?
For you to claim this credit, you must earn $400,000 or less for a married couple filing jointly. Also, for individuals earning $200, 000 or less supporting dependent child. In addition to that, you must have lived with the child for at least 6 months, and have provided at least half of the dependent’s support that year.
How to claim child tax credit – the smart way
When filing your tax returns, you can claim child tax credit. The best way to file for this tax credit is through online software. You can try the traditional paper works, but that is very tedious and erroneous. The best method is through modern technique – the online tax filing method. By just answering a few questions, these online methods can help you claim for child tax credit 2020. A good example is TurboTax, where you just need to submit some details, answer a few questions, and your claim will be filed for you.