It’s essential to claim any credits you qualify for to maximize your tax return.
Determining your eligibility for tax credits involves meeting specific criteria for each credit. Here’s a breakdown of the eligibility requirements for the Child Tax Credit (CTC), Child and Dependent Care Credit, Earned Income Tax Credit (EITC), and Additional Child Tax Credit (ACTC):
Child Tax Credit (CTC)
- Age: The child must be under 17 at the end of the tax year.
- Relationship: The child must be your son, daughter, stepchild, foster child, sibling, stepsibling, or a descendant of any of these.
- Support: The child must not provide more than half of their own support.
- Residency: The child must have lived with you for more than half of the tax year.
- Dependency: The child must be claimed as a dependent on your tax return.
- Citizenship: The child must be a U.S. citizen, U.S. national, or U.S. resident alien.
- Income Limits: Your income must be $200,000 or less ($400,000 or less if filing jointly) to qualify for the full credit.
Child and Dependent Care Credit
- Work-Related Expenses: You must have paid for care to enable you (and your spouse, if filing jointly) to work or look for work.
- Qualifying Person: The care must be for a child under 13, a spouse, or a dependent who is physically or mentally incapable of self-care.
- Residency: You (and your spouse, if filing jointly) must have lived in the U.S. for more than half of the year.
- Income Limits: The credit is based on a percentage of your work-related expenses, with higher percentages for lower incomes
Earned Income Tax Credit (EITC)
- Earned Income: You must have earned income from employment or self-employment.
- Investment Income: Your investment income must be below a certain limit.
- Social Security Number: You, your spouse (if filing jointly), and any qualifying child must have a valid Social Security number.
- Citizenship: You must be a U.S. citizen or resident alien all year.
- Filing Status: You cannot file Form 2555 (Foreign Earned Income) and must meet certain rules if separated from your spouse.
Additional Child Tax Credit (ACTC)
- Eligibility for CTC: You must be eligible for the Child Tax Credit but unable to claim the full amount due to low tax liability.
- Earned Income: You must have earned income of more than $2,500.
- Qualifying Child: The child must meet the same criteria as for the CTC.
- Income Limits: The refundable portion of the credit is up to $1,700 per qualifying child.
To determine your eligibility, you can use the IRS’s Interactive Tax Assistant or consult with a tax professional.