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  5. 2020 Child Tax Credit Calculator and Top 7 Requirements

2020 Child Tax Credit Calculator and Top 7 Requirements

Updated for Tax Year 2020


OVERVIEW

The Child Tax Credit can significantly reduce your tax bill if you meet all seven requirements: 1. age, 2. relationship, 3. support, 4. dependent status, 5. citizenship, 6. length of residency and 7. family income. You and/or your child must pass all seven to claim this tax credit.


The federal tax filing deadline for individuals has been extended to May 17, 2021. Quarterly estimated tax payments are still due on April 15, 2021. For additional questions and the latest information on the tax deadline change, visit our “IRS Announced Federal Tax Filing and Payment Deadline Extension” blog post.

For information on the third coronavirus relief package, please visit our “American Rescue Plan: What Does it Mean for You and a Third Stimulus Check” blog post.


 

Two girls hugging and smiling
The Child Tax Credit has been expanded with the third stimulus relief package (American Rescue Plan). Starting with tax year 2021 (the ones filed in 2022) the age limit and the amount of the credit will be increased and it will become fully refundable – meaning you may be eligible for the benefits even if you don’t owe taxes. For the latest details, visit our 2021 Child Tax Credit blog post.

To claim the Child Tax Credit, you must determine if your child is eligible. There are seven qualifying tests to consider: age, relationship, support, dependent status, citizenship, length of residency and family income. You and/or your child must pass all seven to claim this tax credit. Continue reading to learn more about the requirements or use our child tax credit calculator to determine the maximum child tax credit, maximum additional child tax credit, or maximum other dependent tax credit you may qualify for.

Child Tax Credit Calculator
First, help us determine your child tax credit:
Total number of dependents on your tax return
xTotal number of dependents on your tax return: Include both Child Tax Credit qualifying children and other dependents.
Number of dependents under age 17 at year end
xNumber of dependents under age 17 at year end: Dependent children must be 16 years old or younger on the last day of the tax year.
Modified Adjusted Gross Income (MAGI)

xModified Adjusted Gross Income (MAGI): To calculate your modified adjusted gross income, take your 2020 taxable income (AGI) and add back certain deductions. You might not have any of these changes so it's possible your AGI and MAGI can be identical. Common deductions to add back include:

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Your 2020 Taxable Wages
xYour 2020 Taxable Wages: Your 2020 Taxable Wages is typically income that you earned from working.
$
Filing Status
xFiling Status: Choose the filing status that you will use on your tax return.
Submit
Reset
Your Child Tax Credit Results:
xMaximum Child Tax Credit: You could be eligible for the Child Tax Credit up to this amount based on your specific circumstances as reported on your tax return. For example, your actual Child Tax Credit might be reduced due to other other credits that are available to you. The regular Child Tax Credit is a non-refundable credit meaning that it can only lower your tax to $0. Once your tax is lower to $0 there is no more Child Tax Credit available to you and the excess will not be provided as a tax refund.
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Maximum Child
Tax Credit
xMaximum Additional Child Tax Credit: You could be eligible for the Additional Child Tax Credit up to this amount based on your specific circumstances as reported on your tax return. For example, your actual Child Tax Credit might be reduced due to other other credits that are available to you. The Additional Child Tax Credit is a refundable credit meaning that you might receive this credit even if your tax return shows that your tax is $0.
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Maximum Additional
Child Tax Credit
xMaximum Other Dependent Credit: You could be eligible for the Other Dependent Credit up to this amount based on your specific circumstances as reported on your tax return. The Other Dependent Credit is a non-refundable credit meaning that it can only lower your tax to $0. Once your tax is lowered to $0, there is no more Other Dependent Credit available to you and the excess will not be provided as a tax refund.
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Maximum Other
Dependent Credit
Child Tax Credit Breakdown:

Here’s how to determine which of your kids will qualify you for the credit:

1.  Age test

To qualify, a child must have been under age 17 (i.e., 16 years old or younger) at the end of the tax year for which you claim the credit.

2.  Relationship test

The child must be your own child, a stepchild, or a foster child placed with you by a court or authorized agency. An adopted child is always treated as your own child. ("An adopted child" includes a child lawfully placed with you for legal adoption, even if that adoption is not final by the end of the tax year.) You can also claim your brother or sister, stepbrother, stepsister. And you can claim descendants of any of these qualifying people—such as your nieces, nephews and grandchildren—if they meet all the other tests.

3.  Support test

To qualify, the child cannot have provided more than half of his or her own financial support during the tax year.

4.  Dependent test

You must claim the child as a dependent on your tax return. Bear in mind that in order for you to claim a child as a dependent, he or she must:

  1. be your child (or adoptive or foster child), sibling, niece, nephew or grandchild;
  2. be under age 19, or under age 24 and a full-time student for at least five months of the year; or be permanently disabled, regardless of age;
  3. have lived with you for more than half the year; and
  4. have provided no more than half his or her own support for the year.

5.  Citizenship test

The child must be a U.S. citizen, a U.S. national or a U.S. resident alien. (For tax purposes, the term "U.S. national" refers to individuals who were born in American Samoa or in the Commonwealth of the Northern Mariana Islands.)

6.  Residence test

The child must have lived with you for more than half of the tax year for which you claim the credit. There are important exceptions, however:

  • A child who was born (or died) during the tax year is considered to have lived with you for the entire year.
  • Temporary absences by you or the child for special circumstances, such as school, vacation, business, medical care, military services or detention in a juvenile facility, are counted as time the child lived with you.
  • There are also some exceptions to the residency test for children of divorced or separated parents. For details, see the instructions for Form 1040.

7.  Family income test

The Child Tax Credit is reduced if your modified adjusted gross income (MAGI) is above certain amounts, which are determined by your tax-filing status.

  • In 2017, the phase out threshold is $55,000 for married couples filing separately; $75,000 for single, head of household, and qualifying widow or widower filers; and $110,000 for married couples filing jointly. For each $1,000 of income above the threshold, your available child tax credit is reduced by $50.
  • Beginning in 2018, the phaseout of the credit begins with $200,000 in income ($400,000 for married filing jointly).

What if the credit exceeds my tax liability?

The Child Tax Credit is nonrefundable; if your credit exceeds your tax liability, your tax bill is reduced to zero and any remaining unused credit is lost. However, you may be able to claim a refundable Additional Child Tax Credit for the unused balance.

  • Up to $1,400 per qualifying child is refundable with the Additional Child Tax Credit.
  • You can find out if you're eligible for this refundable credit by completing the worksheet in IRS Form 8812.

Remember, when you file your taxes with TurboTax, we’ll ask simple questions about you and your kids and figure out exactly how much of the Child Tax Credit you’re eligible to receive.

All you need to know is yourself

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