How Can You Benefit from the Child Tax Credit?
The Child Tax Credit (CTC) is a federal tax credit for families with children under age 17. It is designed to lessen the impact of income taxes for families raising children. Qualifying persons who file federal tax returns get back some or all of the federal income tax withheld from their pay during the year. In addition, some workers whose earnings are too low to owe any taxes can get cash back from the credit.
The CTC is worth up to $1,000 per child. Not all families qualify for the full credit. In general, the credit is phased in as earned income goes above $11,300, until the maximum credit is reached. The credit is gradually phased out at very high-income levels.
Receiving the CTC does not affect EIC eligibility or benefits. Likewise, receiving the EIC does not affect the Child Tax Credit eligibility or benefit levels. Families that meet eligibility criteria can receive both credits. The CTC and other tax credits do not count as income in determining eligibility for benefits such as W-2, Medicaid, Food Stamps, Supplemental Social Security (SSI) or public or subsidized housing.
If the amount of the worker's child tax credit is more than their taxes, they may be able to claim an "additional" child tax credit for as much as 15% of their earned income greater than $11,300. Or, if they have three or more children, they may be able to claim the "additional" credit up to the amount of Social Security taxes they paid during the year, less any Earned Income Tax Credit received. The worker would receive the greater credit of the two for which they qualify. The total of both credits still cannot be more than $1,000 for each qualifying child.
About Capital Area Asset Builders
Capital Area Asset Builders (CAAB) is a non-profit organization whose mission is to empower low- and moderate-income residents of the Greater DC Area to take control of their finances, increase their savings, and build wealth for a better future.
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