Things You Should Know about the Child Tax Credit

The Child Tax Credit is an important tax credit that may save you up to $1,000 for each eligible qualifying child. Be sure you qualify before you claim it. Here are five useful facts on the Child Tax Credit:

1. Qualifications. For the Child Tax Credit, a qualifying child must pass several tests:

·         Age. The child must have been under age 17 at the end of 2015.

·         Relationship. The child must be your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half brother, or half sister. The child may be a descendant of any of these individuals. A qualifying child could also include your grandchild, niece or nephew. You would always treat an adopted child as your own child. An adopted child includes a child lawfully placed with you for legal adoption.

·         Support. The child must have not provided more than half of their own support for the year.

·         Dependent. The child must be a dependent that you claim on your federal tax return.

·         Joint return. The child cannot file a joint return for the year, unless the only reason they are filing is to claim a refund.

·         Citizenship. The child must be a U.S. citizen, a U.S. national or a U.S. resident alien.

·         Residence. In most cases, the child must have lived with you for more than half of 2015.

2. Limitations. The Child Tax Credit is subject to income limitations. The limits may reduce or eliminate your credit depending on your filing status and income.

3. Additional Child Tax Credit. If you qualify and get less than the full Child Tax Credit, you could receive a refund even if you owe no tax with the Additional Child Tax Credit.

If you would like any additional information please feel free to contact me.

Amare Berhie, Senior Tax Accountant

AB Tax Online

ABA Tax Accounting

amare@abataxaccounting.com

(651) 300-4777, (612)424-1540, (651) 621-5777