What is the Child Tax Credit and How Do I Qualify?

You may be hearing various information about the Child Tax Credit and you may have questions like, “How much is the child tax credit this year?” and “How do I qualify for the child tax credit?”

You may have also heard about a possible change to the Child Tax Credit, but don’t worry. If you are eligible for the Child Tax Credit (CTC), despite recent talks of changes to the CTC there’s no reason to delay filing. The sooner you file, the sooner you will get your tax refund. Recently, IRS Commissioner Danny Werfel told reporters, “We urge and encourage taxpayers to file when they’re ready,” adding, “Don’t wait on Congress.” Commissioner Werfel also provided reassurance and said, “If there’s a change that impacts your return, we will make the change, and we will send you the update — whether it’s an additional refund or otherwise — without you having to take additional steps.”

TurboTax has you covered and is up to date with the latest tax laws, so you can file your taxes with confidence and accurately claim the Child Tax Credit if you are eligible. There is no need to delay. File now to get your refund as soon as possible. Should tax laws change, TurboTax will be updated quickly as with previous tax law changes and will help ensure that you receive the maximum refund you’re eligible for.

Update: February 1, 2024: House approves the Expanded Child Tax Credit

The House approved the tax bill which includes the expansion of the Child Tax Credit and would restore a set of business tax breaks, extend tax benefits for disaster victims, and the low income housing credit. The bill now moves to the Senate for approval.  

The proposed expansion of the Child Tax Credit includes an increase to the refundable credit portion and proposes a change in the income calculation so that more lower income families would be eligible.

Per IRS Commissioner Werfel, if there’s a change that impacts your return, the IRS will make the change and will send you the update — whether it’s an additional refund or otherwise — without you having to take additional steps.

TurboTax is staying close to the latest on the Child Tax Credit and will be updated quickly as with previous tax law changes and will help ensure that you receive the maximum refund you’re eligible for. 

Check back with the TurboTax blog for the latest information on the Child Tax Credit.

Here is a breakdown of what you need to know about the Child Tax Credit.

What is the Child Tax Credit?

The Child Tax Credit helps tax filers with qualifying children get a tax break.  

How much is the child tax credit and what are the benefits?

For tax year 2023, the Child Tax Credit benefits are as follows:

• Credit changed from up to $3,600 per dependent child under COVID relief in tax year 2021 to its pre-COVID amount up to $2,000 for each dependent child.
• Each dependent child must be under age 17 at the end of the year.
• No longer fully refundable like under COVID relief, but is refundable up to $1,600, meaning you can get up to $1,600 back even if you don’t owe up to $1,600 in taxes.
• Unlike under COVID relief, no advance payments were issued for tax year 2023.
• The credit is available if you earn up to $200,000 as single tax filer or head of household (or up to $400,000 if you are a married couple filing jointly

How Do I Qualify for the Child Tax Credit?

In order to claim the tax credit, you must meet these requirements:

• Your child has a Social Security number (SSN) that is valid for employment and has to be a U.S. citizen, U.S. national, or U.S. resident
• Your child is under the age of 17 at the end of the year
• Be your son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister,  or descendant of them (think grandchild, niece, or nephew
• Your child is claimed as a dependent
• Your child has lived with you for more than half the year
• Your child did not provide more than half of their own support
• Your child can not file a joint return with their spouse for the tax year or file it only to claim a refund of withheld income tax or estimate tax paid 

If you have a dependent that doesn’t qualify for the Child Tax Credit, you may be able to claim the Other Dependent Credit for a maximum credit of $500 for each dependent who meets certain conditions. 

The Child Tax Credit, first reverted to Pre-American Rescue Plan tax rules in tax year 2022 (the taxes filed in 2023), causing some tax filers to see lower refunds than they were accustomed to when COVID relief was in place. Although not a new tax law change for tax year 2023, we want to make sure you are aware of the lower amount since you may be claiming the Child Tax Credit for the first time again since COVID relief was in place. 

Should I wait to file?

No, there is no need to delay.  File now to get your refund as soon as possible. TurboTax is up to date with the latest tax laws. Should tax laws change, TurboTax will be updated quickly as in previous tax law changes and will help ensure you receive the maximum refund you’re eligible for.

Per IRS Commissioner Werfel, if there’s a change that impacts your return, the IRS will make the change and will send you the update — whether it’s an additional refund or otherwise — without you having to take additional steps.

Check Out Other Tax Credits

While you’re claiming the Child Tax Credit, you may also be eligible for the Child and Dependent Care Credit if you sent your child to daycare and even day camp, which may further reduce your taxes.

Don’t worry about knowing about this tax benefit. Meet with a TurboTax Full Service expert who can prepare, sign and file your taxes, so you can be 100% confident your taxes are done right. Start TurboTax Live Full Service today, in English or Spanish, and get your taxes done and off your mind.