Come tax time, you need to take advantage of all the tax credits you qualify for. One of the most beneficial tax credit you can take advantage of is the child tax credit. This tax credit is given to families to help offset the cost of taking care of the child(ren). Families as well as single parents can claim this tax credit when filing their tax returns and that can help them reduce their tax bill or even get a huge tax refund. To help you understand more about child tax credit, here is everything you need to know about it.

How much is child tax credit?

The main aim of child tax credit is to help families take care of costs associated with taking care of dependents. This tax credit can be claimed for up to 3 qualifying children. According to the new tax changes, the child tax credit is worth $2, 000 per qualifying child. How much do you get back in taxes for a child 2020? This question is asked by many taxpayers, and here is the simple answer. The refundable portion of the credit is limited to $1,400, but it can reduce your tax bill by up to $2,000 per qualifying child.

Eligibility?

If you have a child or a dependent child, you can claim the child tax credit. The child must be under 17 years, and you must claim the child as a dependent. More to that, you must be related to the child by blood, or have a step relationship. Besides that, a qualifying child can be a legally adopted child. In addition, you must have provided financial support to the child and lived with the child for at least half the tax year. The tax credit phases out at $200,000 and $400,000 for single taxpayers and joint taxpayers, respectively.

Why is child tax credit important?

The most important thing about child tax credit 2020 is that it will help you reduce your tax bill dollar for dollar come tax season. If your tax credit and withheld are more than what you owe the IRS, you can get a tax refund which can help you sort some of your bills.

Easy way to claim child tax credit?

When you file your tax returns, you need to claim all the tax credits you qualify for. You should avoid the stressing paperwork, manual process and opt for online tax filing process.  When you file your taxes online, you will easily include child tax credit, among other tax credits you qualify for in the whole process. That way, you will ensure the child tax credit counts and can even allow you to get the biggest tax refund from the IRS.

Final Words

Child tax credit is one of the most important tax credits you need to take advantage of. The credit can help lower your tax bill or even allow you to get a bigger tax refund come tax season. Therefore, if you have a qualifying child or children, claim this tax credit come tax season.

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.