Seven Important Requirements for Child Tax Credit That You Need to Know

A Child Tax Credit might significantly decrease the tax bill in case you meet the 7 requirements for Child Tax Credit: 1. Age test, 2. Relationship test, 3. Support test, 4. dependent status test, 5. Citizenship test, 6. length of residency test and 7. family income test. You and/or your child should pass all of the 7 requirements for Child Tax Credit in order to claim for it.

How to Determine Who Actually Qualifies

Following is how to determine which of the children would qualify you for this credit:

• Age Test
  In order to qualify, your child should have been under the age of 17 (that is 16 years old or even below 16) at the end of a tax year for that you are claiming your credit.
• Relationship Test
  Your child should be your real child, the stepchild, or the foster kid that is placed with you by the court or the authorized agency. The adopted kid is always considered as your real kid. ("The adopted kid" includes a kid who is lawfully given to you for the legal adoption and even in case the adoption is not still final by an end of a tax year.) Also, you can claim your sister as well as. You can claim your stepbrother and stepsister. Also, you could claim the descendants of any of the qualifying persons.
• Support Test
  In order to qualify, the kid could not have given more than just half of his/her own financial assistance during a tax year.
• Dependent Test
  You should claim the kid as the dependent on the tax return. Keep in mind that if you are going to claim a kid as your dependent. Then he or she should: 1) is your kid (or an adoptive or a foster kid), sibling, nephew, niece or grandchild; 2) is under the age of 19, or under the age of 24 and fulltime student for minimum 5 months of a year; or is disabled permanently, regardless of his or her age; 3) he or she has been living with you for more than 1/2 year, and 4) have given no more than 1/2 his or her assistance for a year.
• Citizenship Test
  The kid should be an American citizen, an American national or an American resident alien. (For the tax purposes, term "U.S. national" is basically referred to those individuals who born in American Samoa or in Commonwealth of the Northern Mariana Islands.)
• Residence Test
  For more than half of the tax year, the kid should have lived with you for which you have claimed your credit. There’re significant exceptions, although: A kid born (or even died) during a tax year is also considered to have lived with you for a whole year. Absences that are temporary by you or your kid for the special conditions, just like school, medical care, business, vacation, military services and detention in the juvenile facility, are just considered as a time the kid has spent with you. (There’re also a few exceptions to a residency test for the kids of the separated or divorced parents. 
• Family income Test
  A child tax credit is decreased in case the modified adjusted gross income or MAGI is more than the specific amounts. They are actually determined by the tax-filing status. In the year 2017, a phase-out threshold was 55,000 dollars for the married couples who were filing individually; 75,000 dollars for single, head of a household, and the qualifying widow or the widower filers; and 110,000 dollars for the married couples who file together.

What If A Credit Is More Than the Tax Liability?

For the Tax Years before 2018:

A Child Tax Credit is not refundable at all; in case the credit is more than the tax liability. The tax bill is decreased to 0 and the remaining credit that is not used has been lost. But, you might be able for claiming the Additional Child Tax Credit that is refundable for an unused balance. 

For Tax Years after 2017:

The Child Tax Credit is up to 2,000 dollars per qualifying kid with the refundable amount of about 1,400 dollars per qualifying kid. A phase-out for your credit starts from 200,000 dollars.