What is the  Child Tax Credit?

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Child Tax Credit (CTC)

This credit is for individuals who claim a child as a dependent if the child meets additional conditions (described later). It is in addition to the credit for child and dependent care expenses (on Schedule 3 (Form 1040), line 49, or Form 1040NR, line 47) and the earned income credit (on Form 1040, line 17a).

The maximum amount you can claim for the credit is $2,000 for each child who qualifies you for the CTC. But, see Limits on the CTC and ODC , later.

For more information about claiming the CTC, see Claiming the CTC and ODC , later.

Qualifying Child for the CTC

A child qualifies you for the CTC if the child meets all of the following conditions.

  1. The child is your son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half brother, half sister, or a descendant of any of them (for example, you grandchild, niece, or nephew).

  2. The child was under age 17 at the end of 2018.

  3. The child did not provide over half of his or her own support for 2018.

  4. The child lived with you for more than half of 2018 (see Exceptions to time lived with you , later).

  5. The child is claimed as a dependent on your return. See Pub. 501 for more information about claiming someone as a dependent.

  6. The child does not file a joint return for the year (or files it only to claim a refund of withheld income tax or estimated tax paid).

  7. The child was a U.S. citizen, U.S. national, or U.S. resident alien. For more information, see Pub. 519, U.S. Tax Guide for Aliens. If the child was adopted, see Adopted child , later.

 

Example.

Your son turned 17 on December 30, 2018. He is a citizen of the United States and you claimed him as a dependent on your return. You cannot use him to claim the CTC because he was not under age 17 at the end of 2018.

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If your child is age 17 or older at the end of 2018, see Credit for Other Dependents (ODC) , later.

Adopted child.

 

An adopted child is always treated as your own child. An adopted child includes a child lawfully placed with you for legal adoption.

If you are a U.S. citizen or U.S. national and your adopted child lived with you all year as a member of your household in 2018, that child meets condition (7), earlier, to be a qualifying child for the CTC (or condition (3), later, to be a qualifying person for the ODC).

Exceptions to time lived with you.

 

A child is considered to have lived with you for more than half of 2018 if the child was born or died in 2018 and your home was this child’s home for more than half the time he or she was alive. Temporary absences by you or the child for special circumstances, such as school, vacation, business, medical care, military service, or detention in a juvenile facility, count as time the child lived with you.

There also are exceptions for kidnapped children and children of divorced or separated parents. For details, see your tax return instructions for column (4) of the section on Dependents.

Qualifying child of more than one person.

 

Special rules apply if a child is the qualifying child of more than one person. For details, see your tax return instructions for column (4) of the section on Dependents and Pub. 501.

 

Many people claim the child tax credit to help offset the cost of raising children. Tax reform legislation enacted last year made changes to that credit. Here are some important things for taxpayers to know about the changes to the credit.

  • Credit amount. The new law increases the child tax credit from $1,000 to $2,000. Eligibility for the credit has not changed. As in past years, the credit applies if all of these apply:
     
    • the child is younger than 17 at the end of the tax year, December 31, 2018
    • the taxpayer claims the child as a dependent
    • the child lives with the taxpayer for at least six months of the year
       
  • Credit refunds. The credit is refundable, now up to $1,400. If a taxpayer doesn’t owe any tax before claiming the credit, they will receive up to $1,400 as part of their refund.
     
  • Earned income threshold. The income threshold to claim the credit has been lowered to $2,500 per family. This means a family must earn a minimum of $2,500 to claim the credit.
     
  • Phaseout. The income threshold at which the child tax credit begins to phase out is increased to $200,000, or $400,000 if married filing jointly. This means that more families with children younger than 17 qualify for the larger credit.

Dependents who can’t be claimed for the child tax credit may still qualify the taxpayer for the credit for other dependents.  This is a non-refundable credit of up to $500 per qualifying person. These dependents may also be dependent children who are age 17 or older at the end of 2018. It also includes parents or other qualifying relatives supported by the taxpayer.

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Child Tax Credit

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