Everyone loves the Child Tax Credit
Here's why:
Raising children in the 21st century is hard work and the most rewarding. This credit is in place to give back to the working parents to offset expenses of raising children. Both the left and right in politics agree the Child Tax Credit is a happy medium for working families. Whether you are welcoming your first child or your fourth, this credit is for you.
When it comes to credits, its very easy to get them mixed up. The Earned Income Credit is similar to the Child Tax Credit and we would like to clear up the differences with listing seven qualifications you need to know when filing for this credit.
There are 7 qualifications for this credit:
Age- child/children must be under the age of 17
Relationship to claimer- child/children claimed must be yours by blood, step children, adopted or foster child put in place by a court or authorized agency. Any adopted children are legally yours. Younger siblings, step-brother or step-sister, and all dependents such as cousins, nieces, nephews and grandchildren.
Child's Support- the child can't provide more than half of his or hers financial support throughout the year.
Proof of dependency- the child must be yours (as stated above in 2), living with you for more than half the year
Citizenship- the child must be a United States citizen, United States national or a U.S. resident alien.
Residency- you must show proof that the child lives with you. For example a letter from school addressed to the child or a doctors note with the child's address.
Family Income- parents filing together have a cap of $110,000, married parents filing separately have the cap of $55,000. Single parents or head of household have $75,000 cap. For every $1,000 of income over the limit, there is a $50 reduction on the tax return.
How much is the credit?
Parents can expect to get back $1,000 for each child filing for 2017.
In 2018, the CTC will be increasing to $2,000.
