How to Claim the $2000 Child Tax Credit

The Child Tax Credit can lower your tax bill and put money in your pocket. To qualify, you must have children under age 17 by the end of the tax year and meet income guidelines. Let's check out the details.

Key takeaways:

• Child tax credit – up to $2000 per child.
• Tax refund – up to $1700 is refundable.
• Income level – credit starts to phase out at $200,000 for individuals and $400,000 for married couples.
• Eligibility – Child must be under age 17 years, claimed as a dependent on your return, related to you by birth, marriage, or adoption, and not provide more than half of their support. 
• How to claim – report qualifying children on your tax return.

What is the child tax credit?

The child tax credit is a $2000 tax credit for qualifying children. There is no limit on the number of children you can claim. However, if your income is over $200,000 for a single person or over $400,000 for a married couple, the credit starts to phase out. 

Requirements for children

To qualify, the child must be claimed as a dependent on your return, and they must meet the following requirements:

• Age – Under 17 at the end of the tax year. If your child turns 17 during the tax year, you don't qualify for this credit. 
• Relationship – Child, stepchild, eligible foster child, sibling, step-sibling, half-sibling, or a descendant of one of these such as a grandchild, step-grandchild, niece or nephew, step-niece or step-nephew, or half-neice or half-nephew. 
• Support – The child must not provide more than half of their own support for the year.
• Citizenship – U.S. citizen, U.S. National, or U.S. resident alien.
• Social Security Number – Their Social Security Number must be issued before the due date of your return (including extensions). 

Finally, the child must not file a joint return, unless it's only to claim a refund of withheld taxes. This caveat only applies in rare situations where the child is married but still meets all of the other criteria listed above.

Is the child tax credit refundable?

Only $1700 of the credit is refundable, and that portion of the credit is called the "Additional Child Tax Credit" (ACTC). 

For example, let's say you owe $10,000 in tax and claim one child. Then, the $2000 credit reduces your tax liability to $8000. In contrast, say you owe $500 in tax. Then, part of the credit covers your tax bill, and you can get $1500 back as a refund. Now imagine that you don't owe any tax – in that case, you can only get back $1700 of the credit as a refund.

How to claim the child tax credit

Enter your children's names, dates of birth, their relationship to you, and their Social Security Numbers on your tax return. Then, attach Schedule 8812 (Credits for Qualifying Children and Other Dependents).

If you're using tax prep software, the program will ask you questions about your children, and based on your answers, the program will complete your return and determine if you're eligible for the credits. If you pay a tax preparer, make sure to give them info about the children you are claiming. 

Who claims the child tax credit if the parents are divorced?

Generally, the parent with custody gets to claim the child tax credit. Many parents with shared custody rotate who claims the child tax credit from year to year. 

If desired, the non-custodial parent can provide a written declaration allowing the other parent to claim the child. In this case, the non-custodial parent can claim the child tax credit, but they cannot claim head of household status based on that child. The custodial parent can file as head of household, claim the child care credit, and claim the EITC based on that child.

Who claims the child tax credit if the parents were never married?

Generally, the parent with custody should claim the child tax credit. If both parents are living together or if they share custody equally, the IRS says that the parent with the highest adjusted gross income (AGI) should claim the child. 

Can you claim this credit if you file as married filing separately?

Generally, no, unless you are legally separated, separated under a written separation agreement, or lived apart for the last six months. However, if you're not separated and are living together, you cannot claim the child tax credit unless you file jointly.

Can you claim the child tax credit for your boyfriend or girlfriend's child? 

Unfortunately, no. The child must be related to you by birth or adoption. However, if you lived with the child for the full year and provided over half of their support, you may be able to claim the $500 credit for other dependents, as long as no one else is claiming that child on their tax return. 

What if someone else claimed my child on their tax return?

If you e-file and someone has already claimed your child, the IRS will reject your return. You should mail in a paper return showing the child. The IRS will then send both you and the other person a notice explaining that the child was claimed twice. 

At this point, one of you should amend your returns to remove the child from the return. If you do not amend, the IRS may audit your returns to determine who is entitled to claim the child. Unfortunately, you generally will not get your refund until the entire process has been resolved. 

What if my child is too old for the child tax credit?

You may qualify for the credit for other dependents if your child is too old for the child tax credit. This credit is worth $500, and you must claim your child as a dependent to qualify. 

To claim your child as another dependent, you must provide over half of their support, and no one else may claim them as a dependent on their returns. Additionally, your child must meet one of the following criteria: 

• Under age 19.
• Under age 24 and a full-time student.
• Any age is permanently and totally disabled.
• Live with you for the full year. 

Are there other tax credits for parents?

Parents may also qualify for:

• Child and Dependent Care Credit – a tax credit for a portion of daycare expenses.
• Adoption Credit – a credit for a portion of adoption expenses.
• American Opportunity Credit/Lifetime Learning Credit – tax credits for higher education expenses.
• Earned Income Tax Credit – a credit for parents and other taxpayers who have earned income beneath a certain threshold. 

Am I eligible for the child tax credit?

The IRS has an interactive tool to help you see if you're eligible for the child tax credit. You need your filing status and whether or not you qualify to claim the child as a dependent. Then, the tool prompts you through additional questions. 

Get help claiming tax credits today.

Did you forget to claim a child tax credit? Then, a tax pro can help you amend your return or file a new one if you haven't filed at all. You have three years from the original due date to claim refunds. 

Has the IRS denied your child tax credit? Has someone else claimed your child? Are you having other issues with the child tax credit? Then, use TaxCure to find an experienced professional to help you.