The Child Tax Credit: A Helping Hand for Families

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The Child Tax Credit is a tax credit that can help with the high costs of childcare and rising number of children in poverty. This tax credit has helped millions of families every year, but how much is it? The IRS provides a helpful calculator to determine how much is the child tax credit you could potentially receive back from this tax credit.

Parents or guardians of dependent children under 17 can claim a credit up to $2000 per child. This amount is subject to change, so be sure it how the maximum amount has changed for 2020 and 2021. There are several factors that determine how much is the child tax credit you will receive back from this tax credit. Income level plays an important role in determining how much your family could see refunded on their tax return each year.

For example, if your income is below $15,000 annually as single filing status with one child under 17 years old, then you would owe nothing out-of-pocket to the IRS because there taxes owed at this income range is less than what benefits received through the Child Tax Credit provides (this number increases based on additional dependents and how many children you have).

The Child and Dependent Care Tax Credit have helped millions of families afford child care. The calculation for the credit is straightforward, and it may be figured using the IRS worksheet or a child tax credit calculator.

Simply fill out a few questions and provide a few basic details into the dependents credit finder, and it will tell you whether or not you can claim credit on your tax return. You’ll also know how much money you’ll be able to claim back from the IRS.

The Child Tax Credit is a non-refundable credit in most cases. This implies that the tax credit can only offset taxes to zero, but any extra will not be refunded to the individual. Individuals are permitted to claim the additional child tax credit, which is a refundable tax credit in certain situations. A refundable tax credit may reduce taxable income to zero and result in an increase in government revenue if all requirements are met.

Those who earned more than $3,000 in income and did not use the full child tax credit may claim the additional child tax credit. The calculation for this allowance gets more complicated, so using tax software or speaking with your accountant is advised. Part 2 of Schedule 8812 will be utilized to claim the refundable Additional Tax Child Credit in part 2 of Schedule 8812.