Recently, the IRS has revised the child tax credit amount you will get in 2023 and 2024. You will receive upto $2000 for each qualifying Child.
This will reduce your payable tax bill yearly.
To claim this credit, your Child must be under 18 years old and dependent on you for over half a year. But your Child must meet some other criteria as well.
In addition, this tax credit is also subjected to a phaseout factor. It phases out when your modified adjusted gross income (MAGI) is over $400,000 or $200,000.
According to Census.com, this credit has lifted 2.9 million children out of poverty. So, it is a successful tax credit program.
However, read on if you want to make yourself aware of the child tax credit!
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What is Child Tax Credit?
The child tax credit is a credit that the government grants to parents with children under 18. The parents can use the credit to meet their Child’s expenses like food, clothing, and care.
In addition, the amount of this credit still needs to be fixed. It varies from Child to Child. However, the maximum child credit amount is $2000 per qualifying Child.
An exciting aspect of this tax credit is that if your Child’s tax amount is less than the credit, you get that excess amount as a tax refund. Up to $1,500 is refundable through the Additional Child Tax Credit (ACTC).
What is an Additional Child Tax Credit?
The additional Child Tax credit is a supplement to the child tax credit. Unlike the child tax credit, it is a fully refundable tax credit.
If the credit is above your tax liability, you will receive a refund for that exceeded amount.
You can claim it if your earned income is $2500 in the tax year. You can also claim if any of your children qualifies for Tax credit.
However, you can calculate your ACTC as 15% of earned income above $ 2,500 up to $ 3,000 per Child.
You can claim it through a federal tax return and Schedule 8812. It can reduce your tax liability and result in a tax refund.
Eligibility of Child Tax Credit
To be eligible for the Child Tax Credit, you need to meet the following requirements:
- Your Child must be a U.S. Citizen, national, or resident alien.
- They must have a relationship with you as a son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or descendant of any of these individuals.
- The Child must not be above 17 at the end of the tax year.
- Age requirements and criteria may change in future tax years.
- Your modified adjusted gross income must be at most $200,000 if you are a single filer.
- Your income must be at most $400,000 if you are married filers.
However, you will still get the credit if you make more than the above amounts. But less in quantity.
How do you claim your child tax credit?
To claim your tax credit for a child, you need to use your Form 1040. Also, attach a completed Schedule 8812 and Credits for qualifying Children.
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How do you calculate the child tax credit?
To calculate this credit, you need a tax credit calculator. It is a powerful tool that tells you your future tax credit amount.
Follow the below steps to calculate tax credit for your Child:
Step 1: Access a reliable Child Tax Credit Calculator tool, usually available on official government or reputable financial websites.
Step 2: Gather financial information, including your income and filing status.
Step 3: Collect details about your children, such as their names, Social Security numbers, and birthdates.
Step 4: Put all your children’s and other dependents’ relevant data.
However, ensure you know the updated tax information, as it occasionally changes.
FAQs
How much is the child tax credit for 2023?
1. What is the Child Tax Credit for 2023 receive?
You will receive $2000 for each qualifying Child as a child tax credit in 2023. But your MAGI must be between $2000 and $40000.
2. Can I claim my newborn on taxes in 2023?
No, you can not claim tax credit for a child born in 2023. You have to wait until 2024. When filing for a tax credit, you provide information about what happened that year.
So, if you are claiming a tax for your Child born in 2023, you will claim it in 2024 and provide the information about your 2023 things
3. How much can a dependent child earn in 2023 without paying taxes?
A child has to pay taxes in 2023 if their unearned income is above $1,250 in 2023. Also, they have to pay taxes if their earned income exceeds $13,850 in 2023
4. Can You Get The Child Tax Credit With NO Income?
You can only get a child tax credit if you meet specific income standards for CTC. You must file your 2022 taxes and earn $200,000 if you are single and $400,000 if you are a family.
