Filing taxes may not seem exciting, but filing them right can save you quite a bit of money. And that’s always exciting news, right? Learning about tax credits and deductions that you qualify for can make a big difference tax time.
If you’re a parent, you’ll be happy to know that you may qualify for a tax credit if you have children. This credit can help you decrease your tax burden.
How Much is the Child Tax Credit?
On your 1040 and 1040A, you can claim $1,000 per child that meets IRS’ qualifications. The Child Tax Credit is a nonrefundable tax credit, meaning it can reduce your taxes owed, but you will not receive a refund from it (with few exceptions).
How Do I Qualify for the Child Tax Credit?
In order to claim the full tax credit, you must meet the IRS requirements, these include:
• Your child is under the age of 17 at the end of the year and either a US citizen or resident.
• You must be able to provide your child(ren)’s Social Security number.
• The child has lived with you for more than half the year.
• Your household income is below the phase out threshold.
o Married (Filing Joint): $110,000
o Married (Filing Separately): $55,000
o Single: $75,000
If you make more than the above amounts, your tax credit will phased out at $50 total for every $1,000 your modified adjusted gross income goes beyond the IRS’ limits. Read the full details from the IRS on the Child Tax Credit.
Check Out Other Tax Credits
While you’re claiming the Child Tax Credit, you should see if you qualify to receive the Child and Dependent Care Credit. You may be able to further reduce your tax burden!