The Additional Child Tax Credit (ACTC) is a tax credit that helps low- and moderate-income families offset the cost of raising children. The ACTC is available to taxpayers who meet certain requirements, including:
- Income limits: The ACTC is phased out for taxpayers with higher incomes. For 2023, the income limits are $200,000 for single filers and $400,000 for married couples filing jointly.
- Age of child: The child must be under the age of 17 at the end of the tax year.
- Relationship to child: The child must be the taxpayer’s son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, grandchild, niece, or nephew.
- Dependency: The taxpayer must claim the child as a dependent on their tax return.
- Support: The child cannot provide more than half of their own support.
- Residency: The child must have lived with the taxpayer for more than half of the year.
- Citizenship or residency: The child must be a U.S. citizen, U.S. national, or U.S. resident alien.
- Filing status: The taxpayer cannot file a joint return with anyone other than their spouse.
How to Claim the ACTC
To claim the ACTC, taxpayers must complete the Child Tax Credit Worksheet in the Form 1040 instructions. If they qualify, the worksheet will direct them to fill out Schedule 8812 to claim the ACTC.
Amount of the ACTC
The amount of the ACTC is $2,000 per eligible child. The credit is refundable, which means that taxpayers can receive up to $1,600 of the credit as a refund even if they do not owe any taxes.
Phase-Out of the ACTC
The ACTC is phased out for taxpayers with higher incomes. The phase-out begins at $200,000 for single filers and $400,000 for married couples filing jointly. The credit is reduced by $50 for each $1,000 of modified adjusted gross income (MAGI) above these amounts.
Other Requirements
In addition to the requirements listed above, taxpayers must also have a valid Social Security number for the child in order to claim the ACTC.
The ACTC is a valuable tax credit that can help low- and moderate-income families offset the cost of raising children. Taxpayers who meet the eligibility requirements should make sure to claim the ACTC on their tax return.
Child Tax Credit 2023 – What is the Additional Child Tax Credit (ACTC)
FAQ
Who qualifies for child tax credit 2024?
Who is eligible for the other dependent credit?
What is the difference between CTC and ACTC?
Who is eligible for additional child tax credit?
Taxpayers with more than $2,500 of taxable earned income may be eligible for the additional child tax credit if they have at least one qualifying child. Taxpayers with three or more children may also be eligible for additional child tax credit regardless of their income.
Who qualifies for the 2023 child tax credit?
You qualify for the full amount of the 2023 Child Tax Credit for each qualifying child if you meet all eligibility factors and your annual income is not more than $200,000 ($400,000 if filing a joint return). Parents and guardians with higher incomes may be eligible to claim a partial credit.
Who is eligible for Child Tax Credit (CTC)?
According to the IRS, children with a Social Security number and who are under the age of 17 by the end of the calendar year are eligible for the CTC. Parents can claim the CTC for each qualifying child if the child has lived with them for more than half the year and can be claimed on their tax return as a dependent.
Can I claim child tax credit if I have 3 children?
Taxpayers with three or more children may also be eligible for additional child tax credit regardless of their income. Note: The IRS cannot issue refunds before mid-February for returns that properly claim the earned income credit (EIC) or the ACTC.