Parents need to verify their child meets the criteria prior to claiming them for a credit.

Prior to filing for the child tax credit, it’s important to review the criteria and determine if your kids are eligible. For parents that are thinking of applying they will need to ensure they meet the: age restrictions, relationship status, financial support, citizenship, residency, dependence and income levels outlined by the government.

Given the number of requirements that families need to meet to obtain a rebate, it’s critical they understand its limitations to avoid disappointment. To determine if your child qualifies to continue on to the article below where they are outlined in detail.

Age Restrictions

To qualify for the tax credit parents must ensure that the child meets the age restrictions. These restrictions state that the child must be under the age of 17 years old. Therefore, the kid will need to be at least 16 years old (or younger) for the year that they are filing taxes for.

Failing to abide by this age requirement will result in a denied claim and the possibility of an audit for the error.

Relationship Status

Another factor that parents will need to qualify for credit is the relationship test. Meaning, the kid claimed will need to be: their own biological child, fostered, or adopted a child that was placed in their care with a court order or authorized agency.

Additionally, people who have a relative (such as a brother, sister, niece, or nephew) placed with them by court order can claim them so long as they are a dependent living in the household.

However, these circumstances can be difficult to determine which is why it’s best to speak with a trained professional to assess the situation.

Financial Support

Parents will also need to ensure that the child did not earn more than half of their own financial support during the year. Although this criterion will not interfere with younger children it can impact the likelihood of receiving a rebate for teenagers or those that have worked a part-time position. Therefore, parents should evaluate their child’s earning for the year prior to submitting the claim.

Citizenship or Residency Test

The child that is claimed must be a U.S. citizen, national, or U.S. resident to qualify. Without this important criterion, the child will not be eligible for money back from the government seeing as they won’t be viewed as a citizen.

Further, for the child to meet the residency requirements they must have lived with the parent for more than half of the tax year. Exceptions to this rule can include: if the child has died during the year, was born throughout it, required medical assistance, had a vacation, served in the military, was away for schooling or detention in a juvenile facility that caused them to be out of your care.

Claiming as a Dependent

Parents will also need to claim the child as a dependent on their tax return to qualify. To do this, the child will need to be under the age of 19 (or under the age of 24 and a full-time student), belong to them (as a biological, foster, adoptive, or relative), have lived with them for more than half of the tax year, and have not earned more than half of the household’s income.

Without claiming the child as a dependent, they may not qualify which can prove disappointing for the return.

Limitations to Family Income

The rebate that is given to families can also be impacted by the amount of gross income that the household makes. These limitations are divided into a three-tier system that outlines the financial threshold that couples (and single parents) must earn to qualify for the amount.

For every $1000 above the threshold limitations, the rebate will be reduced by $50.00. If you’re unsure what tier your gross income qualifies you for, consider speaking with a financial professional who will be able to analyze your accounts and determine eligibility.

Prior to filing for the child tax credit parents are recommended to educate themselves about the criteria’s requirements. Without this research, some parents may be disappointed to find they’ve been rejected for the full amount. If your curious to know what your child could qualify to consider getting in touch with a member of our team to help.