Claiming the Child Tax Credit

If you are the parent or guardian of a child, or you are someone who is in a position to claim a child on a tax return, you might be able to claim the child tax credit.  This is a tax credit that is refundable, which means that you can use this tax credit to get a refund from it and may be worth up to $1,000 to you.

This is one of a group of tax credits that are created for families with children in order to ease the financial burden.  Another one is called the "Child and Dependent Care Tax Credit".  Don't confuse this one with the Child and Dependent Care Tax Credit.  See my next blog for information on the Child and Dependent Care Tax Credit.

For the "Child Tax Credit", there are 7 "tests" that you must be able to pass in order to claim the tax credit.

Relationship Test – The dependent child must be either a son, daughter, stepchild, foster child, adopted child, brother or sister; or a descendant of any of these relations such as a grandchild, nephew, or niece.

Residency Test – The dependent child must have lived with the taxpayer for more than half the year (there are exceptions to this rule).  Some of the exceptions are short time absences, such as schooling.

Age Test – The dependent the child must be 16 years old or younger.  (The IRS calls this under 17 years of age, just to confuse the issue).

Support Test – The dependent child can not have provided for more than half of his or her own financial support.

Citizenship Test – The dependent child must be either a citizen or resident alien of the United States.

Dependency Test – The dependent child meets the criteria to be claimed as a dependent of the taxpayer

Income Tax Return Test – The dependent child must hot have filed a joint tax return or (files only to claim a tax refund).