A family of three smiles as they fill out the child tax credit paperwork with their financial adviser because they qualify.

Child Tax Credit: Do You Qualify?

Supporting a family is one of the most stressful financial responsibilities. The cost of paying for clothing, food, housing, and all other basic expenses is thousands of dollars per year for each kid. Fortunately, all people that have children under the age of 18 are entitled to a federal tax exemption for each child that they have. Many people that have children under 17 can also qualify for a child tax credit, which can be up to $1,000 for each child every year. In order to qualify for the child tax credit, there are several requirements that need to be met.

Age of Child

The first requirement to qualify for the tax credit is the age of the child. In order to qualify for the tax credit, the child must be under the age of 17 at the end of the tax year. A child that turns 17 years old before the end of the tax year will not qualify for the tax credit. Any child born during the tax year will qualify for a full year’s worth of the tax credit regardless of the date of birth.

Relationship and Support

Those who are looking to get the tax credit will also have to pass the relationship and support test. For a child to qualify, the child will need to legally be your child, stepchild, or court appointed foster child. If they meet all of the other tests, you can also claim a tax credit for your siblings, grandchildren, or any nieces and nephews that you care for. In all cases, you also have to be able to prove that you provide for at least fifty percent of the child’s financial expenses. You will also have to be able to legally claim the child as a dependent on your tax return.

Citizenship and Residency Test

All children that you are looking to claim for the child tax credit also need to be current US citizens and must have lived with your for at least half of the preceding tax year. However, you still qualify for the Child Tax Credit even if the child was away at school, camp, a juvenile military facility, or another similar type of facility for more than half of the year.

Income Phase Outs

In order to claim the tax credit, you will also have to have an income below the maximum income thresholds. The tax credit begins to phase-out once your modified adjusted gross income is about $55,000 for individuals or $110,000 for married couples filing jointly. If your income is above this amount, the tax credit for each child will decline by $50 for every $1,000 that you earn about the threshold. Therefore, if your income is $20,000 or more above the phase-out levels, you will not be able to receive any benefit from this tax credit.

Last Updated: August 01, 2014