One of the major changes has been on the Child Tax Credit as the amount is now doubled from $1,000 in previous years to $2,000 for this tax year through 2025. The best change about this isn’t all about the amount though, now as much as $1,400 of this amount is refundable which can boost your tax refund exponentially. Unlike an exemption, credit is used to reduce the amount of money you owe to the IRS instead of reducing your taxable income, therefore it’s much more valuable than an exemption. However, there are qualifications that both you and the child needs to meet if you want to claim this credit.

First off, there is an income limit. If your modified adjusted gross income more than $400,000 on a married joint return, and $200,000 for the head of household, you will not be able to claim this credit. However, if your modified adjusted income is lower than these figures, the child needs to meet all the qualifications.

To claim the child tax credit, the child,

  • must be a U.S citizen, U.S resident alien, U.S national, and have a Social Security Number.
  • must be younger than 17 by end of the tax year (16 or younger)
  • must be related to you directly such as son, daughter, stepchild, adopted child, foster child, brother, sister, stepsister, stepbrother, sister, brother, etc. or a descendant of any of these individuals including a grandchild, nephew, and niece.
  • must have lived with you more than half of the tax year.
  • must be claimed as a dependent.
  • must not have provided more than half of his/her own support for the tax year.

If all of these qualifications are right, you can claim a child tax credit and benefit $2,000 from it. There isn’t any limit on how many credits you can take on this so if you have multiple children that qualify for this credit, you’re set to go.

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