In order to help American taxpayers with children financially, the federal tax benefit known as the child tax credit is crucial. When they submit their 2022 tax returns in 2023, people with children under the age of 17 may be qualified to claim a tax credit of up to $2,000 per qualified dependent. Of that credit, $1,500 might be refundable.
The credit is designed to support parents while they raise their children and to assist them in covering the costs of doing so. The children must typically reside with you for more than half the year in order to be claimed.
For children to be eligible for the CTC, they must have an SSN. Parents do not have to have a SSN, but must have a TIN to claim the CTC for their eligible children. Only kids under the age of 17 having SSNs that are good for employment in the US are eligible for the CTC.
For dependents who are not eligible for the CTC, taxpayers may claim the nonrefundable “other dependents credit.” Included are dependents who are above 17 years old, dependents having ITINs, and other qualifying family members residing with the taxpayer they are supporting (such as elderly parents). Using this credit, you can lower your tax liability by up to $500 for each eligible person.
