If you meet the requirements to claim the Child Tax Credit 2014, expect to see a larger tax refund in 2015
If you have a child, you know first hand that being a parent changes your life.
Along with the new responsibility comes the expenses of having a child, such as food, clothing, classes, pictures, day care and so much more. Luckily, the IRS offers a few tax advantages to help with the never ending costs. One in particular is the Child Tax Credit.
Keep in mind however, just because you have a child, it does not automatically qualify you to claim the Child Tax Credit on your 2014 Taxes.
In order to claim the credit on your 2014 Tax Return, you’ll have to meet the 7 IRS Child Tax Credit requirements.
1. Relationship
In order to claim the child tax credit, the child must be one of the following;
- your child
- your stepchild
- a foster child placed with you by a court or authorized agency
- an adopted child (even if the adoption is not final by the end of the tax year)
- your brother
- your sister
- your stepbrother
- your stepsister
- your niece
- your nephew
2. Dependent
If the child’s relationship to you falls within the list above, then you must also be claiming the child as a dependent on your tax return. If someone else is claiming the child as a dependent on their tax return, you won’t be able to claim the Child Tax Credit.
3. Age
At the end of 2014, your child must have been under the age of 17- so 16 years or younger.
4. Citizenship
The child must be one of the following;
- a U.S. citizen
- a U.S. national
- a U.S. resident alien
5. Residence
The child must have lived with you for more than half of 2014.
If your child did not live with you for a certain amount of time in 2014 due to special circumstances, the time away is counted as time the child lived with you. Special circumstances include time spent away due to;
- school
- vacation
- business
- medical care
- military services
- detention in a juvenile facility
6. Financial Support
You must provide at least half of the child’s financial support during the tax year. In other words, the child cannot have provided more than half of his/her own financial support.
7. Family Income
Depending on your modified adjusted gross income (MAGI), the amount you receive from the Child Tax Credit may be reduced.
In other words, there’s a phase out threshold.
Your child tax credit will decrease by $50 for each $1000 of income over the following amounts;;
- $55,000 for married couples filing separately
- $75,000 for single, head of household, and qualifying widow or widower filers
- $110,000 for married couples filing jointly.
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Photo via allthecolor on Flickr
