The Essential Information You Need to Know About Child Tax CreditApril 28, 2023
The Trump administration came up with significant changes on tax cuts. One of the changes affected the Child Tax Credit, and the terms have become friendlier to tax payers. Most families can now qualify for the tax credit, and that enables qualifying filers to save big when filing their tax returns. To learn more essential information about Child Tax Credit for 2021, read on.
A Brief of Child Tax Credit
The Child Tax Credit was designed to help parents and guardians with the high cost of childcare. Qualifying filers need to have a certain level of income. Therefore, the tax credit aims to cut your tax bill or bring more money to your pocket as the tax is refundable. However, not all parents or guardians qualify for the credit as there are set terms defining who qualifies and who doesn’t.
Can You Qualify for Child Tax Credit for 2021?
For you to bring down your tax bill or get a bigger tax refund come tax season, you need to think of 2021 Child Tax Credit. Do you qualify for this tax credit? What are the terms? One of the terms is that you must be having a qualifying child or dependent closely related to you aged 17 years or below at the end of tax year. Also, you must have paid half of the child or dependent expenses for the tax year, and lived with them for at least 6 months. More to that, the child or dependent must be a U.S. National, U.S. resident alien or U.S. citizen.
Besides that, you need to know that Child Tax Credit phases out for tax payers with an income of $200,000(single filers) or $400,000 (filing jointly). Furthermore, you can claim a child that is not yours, provided they are legal residents of the United States, are partially or fully dependent, and you must be supporting them financially.
Is Child Tax Credit Worth Claiming?
Definitely, yes. The tax credit can significantly reduce your tax bill, and if you have paid more tax than your tax liability, you will get a tax refund. The good thing about the tax credit is that it reduces what you owe the IRS dollar for dollar. For Child Tax Credit 2021, you can claim $2,000 per qualifying child, but you can claim a maximum 3 qualifying children. If you qualify, this is good money worth claiming.
Smartest Way to Claim Your Child Tax Credit
Tax calculations can be complicated, and you may need to hire a tax professional. However, with online tax filing software and calculators, the process is very simple, accurate and fast. TurboTax and H&R Block are the leading online tax filing programs. Therefore, use TurboTax or H&R Block when filing your income tax return, and you will claim Child Tax Credit and other deductions you qualify for. The process is very simple, and you can rest assured that you will pay less tax bill or get a bigger tax refund come 2021 tax season.