Child Tax Credit 2020

There is a significant difference between tax deductions and tax credits. While deductions reduce your taxable income, credits have a dollar value. What this means is that the credit amount basically gives you a discount on your tax bill. For the 2020 tax season, the Child Tax Credit is set to be $2,000 and as much as $1,400 of this is refundable. Even if you don’t owe taxes and anticipate a refund, you’ll receive an extra $1,400 added to your tax refund per child.

Here is how much you’ll get in Child Tax Credit depending on your children’s age.

  • Under 17 years of age (16 years old and younger) = $2,000
  • Between the ages of 17 and 18 (or full-time college student aged 19-24) = $500 (known as the credit for other dependents)

In conclusion, tax credits are more valuable than deductions. To be qualified for this valuable credit, there are requirements that both the children and the parent must meet.

Child Tax Credit Qualification Requirements

First and foremost, to claim Child Tax Credit, there is an income limit for the parent. The credit phases out if the adjusted gross income (AGI) is over $200,000 for single parents and $400,000 for married couples filing jointly.

Child Tax Credit 2020

Even if the child is under the age of 17, there are a total of seven qualifications (tests) including the age. These tests are age test, residence test, support test, citizenship test, dependent test, relationship test, family income test.

Child Tax Credit Tests

Age Test

The child must be under 17 years of age at the end of the tax year for which you claim the CTC.

Support Test

The child cannot provide more than half of her or his financial support during the tax year.

Residence Test

The child must have lived with you for more than half of the tax year.

Citizenship Test

The child must be any of the following below.

  • A U.S. Citizen
  • A U.S. National
  • A U.S. Resident Alien

Relationship Test

The child must be directly related to you meaning that he or she can be your own child, stepchild, foster child, or brother, sister, stepbrother, stepsister, or descendants of any of these individuals like your nephew, niece, or grandchild, etc.

Family Income Test

The phaseout of the Child Tax Credit begins at $200,000 for single parents and $400,000 for married couples filing jointly.

There is also the additional child tax credit. Some taxpayers are eligible to get even more for their qualifying child. Read more below.

IRS Schedule 8812

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