Additional Child Tax Credit: Low-income families in the US often have trouble paying their bills, especially when they have kids. The Child Tax Credit (CTC) is very helpful because it lets families who qualify claim up to $2,000 for each qualifying child under 17. The credit cuts taxes directly, dollar for dollar, which makes it a useful way to lower overall tax bills. The refundable part, called the Additional Child Tax Credit (ACTC), gives up to $1,600 per child to families who don’t owe much or any income tax. This can help them out financially, even if they don’t owe much or any income tax.
The CTC helps up to 48 million eligible adult applicants across the country pay for the costs of raising children. The application process can be hard, but the financial help it provides is a big plus for those who are eligible.
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The Additional Child Tax Credit is available to whom?
The child’s age, relationship to the applicant, and financial circumstances are just a few of the requirements that must be fulfilled in order to qualify.
You can claim the Additional Child Tax Credit (ACTC) on your federal tax return. To start, you need to fill out the standard Child Tax Credit Worksheet that comes with Form 1040 or 1040-SR. If you can make the extra claim, you need to fill out Schedule 8812.
You can get back up to $1,600 of the $2,000 for each eligible child in 2024 and 2025 if the Additional Child Tax Credit makes your tax bill zero. The IRS has given the following information about what you need to do to apply for it:
- A child who is eligible must have a Social Security number from the Social Security Administration before the due date of your tax return, even if you have asked for an extension.
- If your adjusted gross income is more than $200,000 ($400,000 for married couples filing jointly), the Additional Child Tax Credit will become less valuable over time.
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ACTC can’t be used if you or your spouse (if you’re filing a joint return) file Form 2555 or Form 2555EZ (without foreign earned income).
For a child to be a qualifying child, the applicant and any children living with them must have the following traits:
- Be younger than 17 by the fiscal year’s end.
- Fulfill the residency and relationship requirements for a standardized definition of a qualifying child.
- For the tax year, don’t contribute more than half of your own income.
- Have resided with you for more than half of the tax year, with the exception of children of divorced or separated parents, temporary absences, births or deaths that occurred during the year, and kidnappings or disappearances.
- Being listed on your return as a dependent.
- Avoid filing a joint return for the entire year, or only file a joint return to get your estimated or withheld taxes back.
- Be a citizen, national, or resident alien of the United States.
- Before the due date of your tax return (including extensions), you must have a Social Security Number that has been issued by the Social Security Administration.
