The child tax credit is a per-child tax credit against your personal income tax liability. The child tax credit is $2,000 per child.
If you have a qualifying child under the age of 17, you may be entitled to claim this credit. A qualifying child may be a dependent child, stepchild, adopted child, sibling, or stepsibling (or descendant of these individuals), or an eligible foster child. The child must be a U.S. citizen or resident and must live with you for over half the year.
A nonrefundable credit of $500 is also available for qualifying dependents other than qualifying children.
The child tax credit and the credit for other dependents begin to phase out if your modified adjusted gross income (MAGI) exceeds a certain level. The credit can be fully phased out for MAGI in excess of $400,000 for married persons filing jointly, $200,000 for all others. In general, the credit is reduced by $50 for each $1,000 that your MAGI exceeds the above amounts. To claim the child tax credit, you must file either federal Form 1040 or 1040A.
A qualifying child may be
a dependent child, stepchild, adopted child, sibling, or step-sibling, or an eligible foster child.
The child tax credit is refundable, so you may be able to obtain a refund even if the credit exceeds your regular or alternative minimum tax (AMT) liability. The credit is refundable to the extent of 15 percent of your earned income in excess of $2,500, up to $1,600 per-child (in 2023). Special rules may apply if you have three or more qualifying children and are eligible for the earned income credit (EIC).
IMPORTANT DISCLOSURES Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual's personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2021.