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Child Tax Credit

Program Type: Tax Credit

Status: Ongoing

Administered By: Internal Revenue Service (IRS)

Overview

The Child Tax Credit (CTC) is a tax credit that provides financial support to families with children. The credit amount and eligibility requirements have been expanded in recent years to provide more assistance to families, particularly those with lower incomes.

Current Credit Amounts

For tax year 2023 and beyond:

  • Up to $2,000 per qualifying child under age 17
  • Up to $1,600 may be refundable (Additional Child Tax Credit)
  • Credit phases out for higher-income taxpayers

2021 Expansion (American Rescue Plan)

For tax year 2021 only, the credit was significantly expanded:

  • $3,600 for children under age 6
  • $3,000 for children ages 6-17
  • Fully refundable (no minimum income requirement)
  • Advance monthly payments from July to December 2021
  • Higher income thresholds before phase-out

Eligibility

To claim the Child Tax Credit, your child must:

  • Be under age 17 at the end of the tax year
  • Be your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of them
  • Have lived with you for more than half of the tax year
  • Be claimed as a dependent on your tax return
  • Be a U.S. citizen, U.S. national, or U.S. resident alien
  • Have a valid Social Security number

Income Limits

For 2023 and later:

  • Full credit for married couples filing jointly with income up to $400,000
  • Full credit for other filers with income up to $200,000
  • Credit phases out by $50 for each $1,000 of income above these thresholds

How to Claim

To claim the Child Tax Credit:

  1. File your federal tax return (Form 1040)
  2. Complete Schedule 8812 if claiming the Additional Child Tax Credit (refundable portion)
  3. Provide Social Security numbers for all qualifying children
  4. Ensure your children meet all eligibility requirements

Advance Payments (2021 Only)

In 2021, eligible families received advance monthly payments:

  • Half of the estimated credit was paid in advance (July-December 2021)
  • Remaining credit claimed on 2021 tax return
  • Families could opt out of advance payments
  • Reconciliation required on 2021 tax return

Additional Child Tax Credit (Refundable Portion)

If the Child Tax Credit exceeds your tax liability, you may be eligible for the Additional Child Tax Credit:

  • Up to $1,600 may be refundable for 2023
  • Based on earned income (at least $2,500 required)
  • Calculated on Schedule 8812

Important Dates

  • Tax Filing Deadline: April 15 (or extended deadline)
  • 2021 Advance Payments: July-December 2021 (program ended)
  • 2021 Reconciliation: Required on 2021 tax return

Resources

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