Tax season can be stressful, especially for families counting on a refund. The Child Tax Credit (CTC) is a major benefit that helps parents reduce their tax bill. However, many taxpayers make simple mistakes that can result in their credit being denied. If you qualify for this credit, it’s important to file correctly to avoid missing out on valuable financial support.
Let’s go over everything you need to know about the Child Tax Credit, how to claim it, and the three most common mistakes that could prevent you from getting your money.
What Is the Child Tax Credit?
The Child Tax Credit (CTC) is a financial benefit designed for parents and guardians with dependent children. It helps reduce the amount of taxes owed and, in some cases, even provides a refund.
How Much Can You Get?
For the 2024/2025 tax year, the credit amount per child is $2,000, and up to $1,700 of that can be refunded if you qualify for the Additional Child Tax Credit (ACTC).
However, you must claim the credit on your tax return to receive it. Many families miss this opportunity simply because they don’t know how to apply.
How to Apply for the Child Tax Credit
To claim the Child Tax Credit, follow these steps when filing your tax return:
- Use Form 1040 or 1040-SR (if you’re over 65).
- Include the required information for each eligible child:
- Full name
- Valid Social Security Number (SSN)
- Relationship to you (child, grandchild, sibling, etc.)
- Proof that they lived with you for at least half the year
- Meet the income requirements:
- Single filers must earn less than $200,000.
- Joint filers must earn less than $400,000.
If your income exceeds these limits, your credit will be reduced or denied.
3 Common Mistakes to Avoid
Many taxpayers make errors when claiming the Child Tax Credit. Here are the most common ones and how to avoid them:
1. Not Applying for the Credit at All
Many taxpayers assume the IRS will apply the credit automatically, but that’s not the case. You must request the credit when filing your return. If you don’t, you won’t receive it—even if you qualify.
2. Providing Incorrect Information
If you enter incorrect details (such as a wrong Social Security Number or misspelled names), the IRS may reject your claim. Double-check all the information before submitting your tax return to avoid delays or denials.
3. Earning More Than the Income Limit
If your annual income exceeds $200,000 for single filers or $400,000 for joint filers, you won’t qualify for the full credit. Be aware of these limits before claiming the Child Tax Credit.
What to Do If You’re Unsure
If you’re confused about your eligibility or how to file, consider these options:
- Consult a tax professional – They can ensure you claim all the credits you qualify for.
- Use the IRS website – They offer tools and calculators to help determine your eligibility.
- Check your state programs – 16 states offer their own Child Tax Credit programs, so you might qualify for additional refunds!
Don’t Miss Out on Your Child Tax Credit
The Child Tax Credit is a valuable benefit that can help families reduce their tax burden or receive extra cash back. However, simple mistakes can cost you hundreds or even thousands of dollars. Make sure to file correctly, verify your child’s information, and check the income limits to avoid problems.
Taking the time to file your taxes properly can ensure you get the money you deserve!
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