How to Claim the Child Tax Credit

Parents deserve a bit of a (tax) break now and then.

As a busy parent, filing taxes can be found on the To-Do list between Monday’s soccer practice and Thursday’s parent-teacher conference. Do yourself a favor this year and see if you are eligible for the Child Tax Credit. Tax credits are great because, unlike deductions, they reduce your tax bill dollar-for-dollar. That means, a larger tax refund for you and your family!

What is the Child Tax Credit?

The Child Tax Credit offers a credit of up to $1,000 per child to qualifying taxpayers. It is only available to those who can claim a child as a dependent and meet several other requirements.

There is no limit to the number of children you can claim using the Child Tax Credit, however, claiming lots of kids may subject you to the Alternative Minimum Tax (AMT).

Who can claim the Child Tax Credit?

In order to claim the Child Tax Credit, the child in question must:

  • be your son, daughter, stepchild, foster child, adopted child, brother, sister, or a descendant of any of these
  • have lived with you for more than half the year
  • be under age 17 at the end of the year
  • not have provided more than half of his/her own support
  • be a citizen or resident alien of the United States
  • be younger than you
  • not file a joint return with his/her spouse (though there are exceptions)
  • meet the requirements to be claimed as your dependent
  • be claimed by his/her parents – if claimed by someone else, that person must have a higher AGI than either parent.

Are there income limitations?

The Child Tax Credit phases out beyond certain levels of income:

  • $55,000 for married couples filing separately
  • $75,000 for single, head of household, and qualifying widow(er)
  • $110,000 for married filing jointly

The credit is reduced by $50 for every $1,000 of income beyond these thresholds. Note that they are not indexed for inflation.

How much of the credit is refundable?

Generally if credits and deductions manage to reduce your tax liability to zero, you don’t receive the remaining amount as a refund. In other words, the best you can hope for is to break even – there’s no chance of making a profit from your tax return.

But if the Child Tax Credit helps reduce your tax liability to zero, the remaining amount is refunded to you in the form of the Additional Child Tax Credit. Exactly how much is refundable depends on how many kids you have and how much income you earn.

Taxpayers with one or two children can receive the smaller of:

  • the unused portion of the Child Tax Credit, or
  • 15% of your earned income over $3,000

Taxpayers with three or more children can receive the smaller of:

  • the unused amount or,
  • the larger of either
    • 15% of a person’s earned income over $3,000, or
    • the sum of Social Security and Medicare taxes paid minus the earned income credit

Cross off taxes on your To-Do list today!

Keeping track of all these IRS rules and regulations can get confusing. Thankfully RapidTax keeps things simple. Just enter your information into its online application and it will make sure you claim every cent of the Child Tax Credit that you deserve.

Easy, right? You’re done…just in time to get the kids off the bus!

Do you qualify to claim the child tax credit on your tax return this year?


48 Replies to “How to Claim the Child Tax Credit”

  1. My husband needs to file a new w4. We have 5 kids and I don’t work and he does. We file every yr married filing jointly. We also have our 2016 taxes on hand that show we got child tax credit back which is money for us. I don’t know how to answer the w4 form. And I don’t know where on our taxes I can go back to look.. He can’t do it eithrt because itd confusing. Line G,is confusing.

    1. The IRS has a tool to help you determine how many allowances you should claim on your W-4 Form. Simply click here to use the IRS Withholding Calculator. To help determine how many tax withholding allowances you should claim, it might help to look at your returns or payments from previous years. If you received a large refund, consider increasing the number of allowances you claim so less tax is withheld. If you paid the IRS a large sum when you filed your return, decrease the number of allowances you claim. Speaking with payroll will better inform you on the best number of allowances you should claim on your W-4.

    2. Natalie,

      Completing a new W-4 can be confusing. It is important to remember that your W-4 is only used by your employer to determine how much federal tax to withhold from each paycheck. The information you enter on the W-4 will not be compared to your tax return. With this in mind, the more exemptions you claim (the number on W-4 line H) the less will be withheld from each paycheck. Line G basically offers you the option of additional exemptions if you qualify for the Child Tax Credit (or the additional child tax credit). If your combined income (tax filer and spouse) is less than $70,000 ($100,000 MFJ) multiply each child by 2, then subtract 1 or 2 from the product depending on the number of children you have. If your combined income is greater, and less than $84,000 (119,000 MFJ) multiply each child by 1 instead.

  2. I was wondering if I worked from January-Match and made $3692 during that time frame will I be able to file my kids on
    My taxes in 2018 because I have been on maternity leave and I’m the process of seeking employment now but having a hard time.

    1. Hello Ty,
      You can claim you children on your taxes. You may qualify for the Child Tax Credit if the qualifying dependents meet all requirements and take into consideration you income.

  3. Hi if i am married filing separately. Can only 1 parent claim child tax credit? (line g). 2 children =4 (2 per eligible child) On the w4 form. If 1 parent puts 4 should the other parent leave this blank or put a 0? This is different from line D. I would love an explanation on this as I want to fill out the form correctly. Again regarding line G. Would line D be 2 and line g be 4 and then does the other parent leave d and g blank? Also the less 1 (2-4 eligible children, less than 100k married) is very confusing.

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